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Fri 11th Nov 2022 - Update: Hospitality sales climb 4% in Britain's top cities but inflation curbs real-terms growth, recession looms
Hospitality sales climb 4% in Britain’s top cities but inflation curbs real-terms growth: Pubs, bars, and restaurants are recording positive sales in Britain’s major cities – but high inflation is making real-terms growth very difficult. The latest “Top Cities” report from hospitality research experts CGA by NielsenIQ and Wi-Fi solutions provider Wireless Social shows combined sales in Britain’s ten most populous cities in the four weeks to 22 October 2022 were 4% higher than in the same period in 2019. Seven of the ten cities recorded growth. The total number is in line with figures recorded by the separate Coffer CGA Business Tracker in recent weeks. However, with Britain’s inflation rate now exceeding 10%, sales are well below pre-covid comparatives in real terms. Logins are also still significantly short of the levels of 2019. The “Top Cities” report combines sales data from CGA and device log-in statistics from Wireless Social to provide a “vibrancy” ranking of the top ten cities. Manchester heads the list of top cities, ahead of Birmingham, which makes the top two for the fourth time in a row. Both cities recorded double-digit sales growth in the latest four-week period. At the other end of the rankings, London is bottom for the third period in a row, with both sales and device check-ins still short of pre-covid levels – though both metrics are now moving closer to 2019’s numbers. CGA client director Chris Jeffrey said: “Our latest report confirms public demand for eating and drinking out is stable. It highlights hospitality’s huge contribution to the vibrancy of city centres. However, with consumers’ spending under pressure from rising costs in energy, food, mortgages and more, the post-covid recovery will come under severe strain in the months ahead. Businesses have a crucial role to play in Britain’s economic growth, but they need targeted support to help them through these unprecedented challenges.” Julian Ross, founder and chief executive of Wireless Social, added: “It’s hugely encouraging to see growth across the sector, in terms of sales and footfall, in a number of the UK’s biggest cities. However, this growth will count for very little if the economic environment continues to be as volatile as it is currently. With the World Cup and a restriction-free Christmas on the horizon, hospitality businesses can expect a boom in short-term sales. But it’s the weeks and months that follow that require attention, and businesses are going to need targeted support to continue to grow and develop on the other side.”

Latest edition of Propel Turnover & Profits Blue Book being sent to Premium subscribers today: The latest edition of the Propel Turnover & Profits Blue Book, which is produced in association with Mapal Group, will be sent to Premium subscribers today (Friday, 11 November), at midday. The Blue Book now features 656 companies following the addition of another 18 companies, while accounts have been updated for 74 businesses. The Blue Book shows 354 sector companies reporting total profits of £2.1bn while total losses of £4.0bn are being reported by 302 companies. They are turning over a collective £33.6bn. The Blue Book, which is updated every month, provides an insight into UK operator turnover and profitability over five years, profit conversion and directors’ earnings. Premium subscribers also receive access to three other databases: the Propel Multi-Site Database, produced in association with Virgate; the New Openings Database; and the UK Food and Beverage Franchisor Database. Companies can now have an unlimited number of people receive access to Propel Premium for a year for £895 plus VAT – whether they are an operator or a supplier. The single subscription rate is £445 plus VAT for operators and £545 plus VAT for suppliers. Email to upgrade your subscription. Subscribers also receive access to Propel’s library of Friday Wrap interviews and now also have access to a curated video library of the sector’s finest leaders and entrepreneurs, offering their insights on running outstanding businesses in the sector. Premium subscribers also receive their morning newsletter 11 hours early, at 7pm the evening before our 6am send-out; regular video content and regular exclusive columns from Propel group editor Mark Wingett.

Britain heads for recession as economy shrinks 0.2%: Britain is heading for recession as latest official data revealed that GDP fell in the third quarter of the year. The Office for National Statistics (ONS) said the nation’s output declined 0.2% in the three months from July to September. It dropped 0.6% in September alone, although the fall was exaggerated by the impact of the extra Bank Holiday for the Queen’s funeral. The data does not mean Britain is already in recession as the technical definition is two consecutive quarters of falling GDP. Output rose slightly by 0.2% in the second quarter, according to revised ONS figures. However, it is increasingly likely that the fourth quarter will see another dip following the surge in interest rates triggered by Kwasi Kwarteng’s disastrous mini-Budget at the end of September, combined with rising energy costs, the cost of living crisis, and plummeting consumer confidence. Last week the Bank of England projected a two year recession – the longest for a century – lasting until summer 2024 as it lifted its interest rate to 3%. The bank warned the UK economy faced “a very challenging outlook” though it said the recession would be relatively shallow. The recession will not be confirmed until well into 2024 when the GDP figures for the fourth quarter are published by the ONS. If would be the third of the 21st century following the slumps caused by the global financial crisis and the pandemic. Policymakers had hoped that Britain’s economy would bounce back strongly from the deep covid-era falls in economic activity caused by the three lockdowns and other restrictions. However, been snuffed out by a huge range of other factors including global supply chain snarl-ups, spiking energy prices made worse by the war in Ukraine, Brexit problems, and rapidly rising interest rates around the world to curb inflation. But the lower than expected US inflation figure yesterday (Thursday, 10 November) raised hopes that the worst of the cost of living crisis may be over. The fall was smaller than the 0.5% consensus forecast among City economists. ONS director of economic statistics, Darren Morgan, said: “With September showing a notable fall partly due to the effects of the additional bank holiday for the Queen’s funeral, overall the economy shrank slightly in the third quarter. The quarterly fall was driven by manufacturing, which saw widespread declines across most industries. Services were flat overall, but consumer-facing industries fared badly, with a notable fall in retail.” Chancellor Jeremy Hunt said: “We are not immune from the global challenge of high inflation and slow growth largely driven by Putin’s illegal war in Ukraine and his weaponisation of gas supplies. I am under no illusion that there is a tough road ahead – one which will require extremely difficult decisions to restore confidence and economic stability. But to achieve long-term, sustainable growth, we need to grip inflation, balance the books and get debt falling. There is no other way. While the world economy faces extreme turbulence, the fundamental resilience of the British economy is cause for optimism in the long run.”

Various Eateries confirms appointment of interim CFO: Various Eateries, the Coppa Club operator, has confirmed the appointment of James Darwent as interim chief financial officer. The company announced in September that Oli Williams would step down today (Friday, 11 November) as chief financial officer and Darwent would replace him temporarily. Darwent has been working alongside Williams since joining the company on 26 September 2022 to ensure a smooth transition. Darwent has 15 years’ experience working in private equity-backed businesses and has previously held roles at Big Table Group and Casual Dining Group as finance director (non-board positions). Prior to this, he held the role of global head of finance at All Saints Retail. He qualified as a certified accountant at Pannell Kerr Forster, now BDO, in 1992.

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