A surge of pubgoers in the final fortnight of December brought a much-needed boost to the industry, providing a "big relief" for businesses.
Pub sales saw an increase of 4.7 per cent compared to December 2023, while bars rebounded from a period of weak trading throughout most of 2024, posting growth of 1.3 per cent, as per the latest CGA RSM Hospitality Business Tracker, as reported by .
London pubs outperformed those in the rest of the country, with sales within the M25 increasing by 4.6 per cent year on year, while venues outside this area saw a rise of 2.8 per cent. .
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"After a modest performance through most of 2024, real-terms growth in December was a big relief for the hospitality sector," said Karl Chessell, director of hospitality operators and food, EMEA, at CGA by NIQ. However, he warned that with business costs set to rise further and consumer confidence remaining shaky, 2025 is likely to pose more challenges for many hospitality businesses.
In November, over 200 hospitality businesses penned a letter to Rachel Reeves warning that increased employers’ national insurance contributions (NICs) could push some businesses into liquidation, while others may have to drastically cut their workforce and reduce investment to cover the additional costs.
Hospitality firms are particularly burdened due to their heavy reliance on part-time staff, who previously didn't meet the threshold for employers to pay tax on their wages but now do.
While there has been talk of raising prices to cope with rising costs, Saxon Moseley, head of leisure and hospitality at RSM, suggested that pubs have limited scope for price increases. "Businesses will need to tread a fine line between raising prices to preserve margins whilst not spooking consumers," he commented.
Fortunately, the anticipated decline in investment and hiring has not materialised as severely as many had feared, with hospitality leaders Marston’s and Young’s reaffirming their investment pledges last week.
However, Kate Nicholls, chief executive of 海角视频Hospitality, expressed reservations: "Real-terms sales growth as a whole is encouraging but with performance varying quite significantly across the sector, it is unlikely to be enough to increase business confidence heading into a challenging year."