Only 34% of business leaders in the eating and drinking out sector have said that they are optimistic about the prospects for the market as a whole in 2018.
A tough year of trading is expected, according to the results of CGA’s exclusive 2018 Business Leaders’ Survey, produced in partnership with Barclaycard.
For the first time in the history of the survey, more leaders reported that their performance had been below expectations (33%) in the past six months than above expectations (26%).
Business rates were found to be the leading cause of concern, followed by the National Living Wage, rising food costs and market saturation.
Brexit is intensifying concerns, with two-thirds (67%) saying their businesses has already been negatively affected by the UK’s decision to leave the EU, with particular fears about staff availability.
Many brands have already announced plans to scale back openings in 2018, with 60% predicting fewer entrants to the market and 90% believing 2018 will see more business failures than 2017.
Despite the difficulties faced by the industry, 64% said that they were optimistic about their own companies’ prospects, down from 68% in 2017. This optimism was strongest among drinks-led operators.
Phil Tate, chief executive of CGA, said: “Our Business Leaders’ Survey paints a complex and fascinating picture of prospects for British pubs, bars and restaurants in 2018. With property, people and food costs rising and the twin threats of saturation and Brexit looming large, brands face something of a perfect storm of challenges this year.
“But this is a very resilient industry and our poll shows there are bright spots and opportunities for growth in the market too. People will continue to enjoy eating and drinking out in 2018, and operators that can best understand and deliver the experiences that consumers crave will be the winners in an ultra-competitive market.”