Flat February for UK hospitality as sales growth stalls

Managed pubs, bars and restaurants saw marginal sales growth of just 0.1% last month, as cost pressures and cautious consumer spending continue to challenge the sector.    Britain’s leading managed hospitality groups recorded like-for-like sales growth of just 0.1% in February, according to the latest CGA RSM Hospitality Business Tracker. The figure points to ongoing pressure on the sector, with sales growth significantly trailing the current rate of inflation. The flat result follows a 1.3% year-on-year drop in January and highlights sustained consumer caution around discretionary spending at the start of 2025. Total sales across all sites, including newer venues opened in the past 12 months, rose by 2.5% in February. Despite the uptick, businesses continue to face persistent inflationary pressures, particularly with further increases to National Insurance contributions scheduled from April.

Pubs outperform, but bars see sharpest decline

Pubs were once again the strongest performing segment, with like-for-like sales up 1.7% compared to February 2024. The boost was partly attributed to the start of the Six Nations rugby tournament. Restaurant groups, however, saw a 0.6% decline in like-for-like sales. Valentine’s Day, traditionally a busy occasion, offered less uplift this year as it fell on a Friday—already one of the sector’s busiest trading days. By comparison, Valentine’s Day in 2024 landed on a Wednesday, delivering an additional mid-week boost. Bars continued their long-term decline, with like-for-like sales down 7.9% year-on-year. The on-the-go segment also struggled, slipping by 1.9%.

London lags behind regions

Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “After a flurry of spending over Christmas, it’s clearly been a challenging start to 2025 for the hospitality sector. Growth is very fragile, and hikes in National Insurance Contributions will pile even more pressure on managed groups." He continued: "We remain optimistic that spending will start to loosen, and brighter weather and big occasions like St Patrick’s Day, Mother’s Day and Easter should help to rally sales. Nevertheless, real-terms growth will remain hard-earned for the foreseeable future.” Saxon Moseley, head of leisure and hospitality at RSM UK, added: “A second month of lacklustre trading results means that the hospitality sector remains in negative territory for the year to date. Consumers are opting to cut back on discretionary spending amidst growing apprehension about the UK economy and global instability. While the medium-term outlook appears more positive, the coming months will be critical for businesses grappling with both waning demand and rising costs. Next week’s Spring Statement represents a final opportunity for the Government to support the sector through this challenging period, with a phased introduction of National Insurance increases and a delay to implementing the Employment Rights Act high on operators’ wish lists.” The news follows just 14% of hospitality leaders saying they felt optimistic about the sectors prospects this year after the NI increase.