UK hospitality firms predict 41 per cent drop in summer sales
UK hospitality firms are predicting a 41 per cent drop in sales over the summer months, although businesses are optimistic that trade will pick up this winter.
According to the latest research, six per cent of hospitality and leisure sector companies are confident about growth this summer.
However confidence surges in the winter months, with 83 per cent of bosses believing their businesses will grow at the end of the year and the beginning of 2021.
Two fifths of hospitality and leisure companies said they had been “kept afloat” by the government’s decision to cut VAT for the sector to five per cent, the research by Barclays Corporate Banking said.
The reduction has been a “lifeline” for the industry, 40 per cent of sector leaders said.
Barclay’s Corporate Banking head of hospitality and leisure Mike Saul said: “The hospitality sector has been one of the hardest hit and the road ahead is tough.
“The government schemes, particularly the Eat Out To Help scheme has given the industry a massive and much needed short term boost.
“Whilst many bosses in the industry have essentially written off this year it is pleasing to see they are feeling more confident in the run up to winter and into next year.”
However most consumers are still uncomfortable eating in a restaurant or a pub, although comfort levels have improved during the Eat Out to Help Out scheme.
According to the EY Future Consumer Index, just 27 per cent of UK consumers currently feel confident eating in a restaurant, and 23 per cent would be comfortable visiting a bar or pub.
EY UK & Ireland head of hospitality and leisure Christian Mole said: “The Eat Out to Help Out scheme has been a welcome intervention which has undoubtedly boosted both revenues and morale across the hospitality sector, but has only been in place for a limited time to a limited effect.
“It’s clear it will still take months before the majority of consumers feel comfortable with eating out so it’s not surprising that businesses are calling for an extension to the scheme beyond 31 August.”