Hospitality Faces January Slump: Sales Dip, Costs Soar

Britain’s Leading Hospitality Groups Take a Small Step Back in January

In a surprisingly tidy way, the CGA RSM Hospitality Business Tracker revealed that January sales for the country’s top restaurant, pub, and bar operators slipped 1.3 % year‑on‑year. It’s the first downturn in a long streak of growth that started with a 3.2 % rise in Dec.

What Boilled Them Down?

Post‑Christmas spending slump – people tightened wallets after the festive season.
Dry January – a nationwide movement to skip alcohol for the whole month added extra pressure.
Storm Éowyn – the weather kept folks inside for the weekend, limiting footfall.

Cost Rise Keeps Hospitality Companies on Their Toes

Even as footfall plummeted, operating costs continued to climb, notably labour. National Insurance contributions are set to jump sharply in April. The Tracker shows a modest 0.6 % growth in total sales (including new venues), but that lags behind the UK inflation of 3 % (CPI). Restaurants, in particular, saw a 1.1 % dip after the holiday rush.

Out‑of‑the‑Way Davy Jones’ Locker: Sector‑by‑Sector

Pubs – the most resilient, taking only a 0.1 % drop.
Restaurants – down 1.1 % as diners mended their holiday plates.
Bars – fell 10.2 % versus January 2024.
On‑the‑go – ended January at a 4.8 % decline.

London’s Extra Spoonful of Trouble

Within the M25, sales fell 1.9 % YoY, while venues beyond it slipped 1.1 %. Spell the same record‑breaking democracy in every corner of Britain, but it’s no surprise the capital felt the extra bite of post‑holiday chill.

Insights From the Experts

Karl Chessell, CGA by NIQ said, “The post‑Christmas euphoria was untied. Consumers are cautious, yet costs keep climbing. The industry’s long‑term outlook is bright, but we’re in dire need of better support.”

Saxon Moseley, RSM UK added, “Our January results confirm the historic reduction in discretionary spending. With energy, food, and payroll costs rising, many operators may struggle. Still, real wage growth is at its highest in years and the fall in rates next year could shore up prospects.”

What’s Next for Pop‑Culture‑Pitched Pubs?

While the numbers are a sobering reminder of the challenges, there’s a silver lining: real wages are climbing, and interest rates are expected to fall further in 2025. Operators who giddy‑up through the rough patch can expect to bounce back in a friendlier environment.