More good news for pubs as December splurge delivers crucial growth
A rush of pubgoers in the last two weeks of December brought much-needed growth across the industry in a “big relief” for businesses.
Pub sales were up 4.7 per cent ahead of December 2023, while bars bounced back from soft trading throughout most of 2024 to post growth of 1.3 per cent, according to the latest CGA RSM Hospitality Business Tracker.
December sales at London pubs comfortably outpaced the rest of the country, according to the tracker. Sales inside the M25 were up by 4.6 per cent year on year, while venues further afield rose 2.8 per cent.
“After a modest performance through most of 2024, real-terms growth in December was a big relief for the hospitality sector,” Karl Chessell, director of hospitality operators and food, EMEA, at CGA by NIQ, said.
“However, with the costs of doing business sure to rise further and consumers’ confidence still patchy, 2025 is likely to be another challenging year for many hospitality businesses.”
In November, over 200 hospitality businesses signed a letter to the Rachel Reeves warning that higher employers’ national insurance contributions (NICs) will force some businesses into liquidation and that others will have to drastically reduce their headcount and slash investment in order to meet the additional costs.
Hospitality firms face a particularly high burden due to their heavy reliance on part-time staff, which previously didn’t come under the threshold for employers to pay tax on their wages but who now do.
While price rises have also been floated to deal with costs, head of leisure and hospitality at RSM, Saxon Moseley, suggested that pubs have little room to increase prices.
“Businesses will need to tread a fine line between raising prices to preserve margins whilst not spooking consumers,” he said.
Luckily, the much-feared depletion of investment and hiring doesn’t – yet – seem to be as bad as many feared, with hospitality giants Marston’s and Young’s both reiterating investment commitments last week.
But the chief executive of UKHospitality Kate Nicholls wasn’t completely convinced: “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.”