Britain’s Hospitality Leadership Confidence Hits Rock Bottom
It’s a bit like walking into a room that once felt bright and now feels dimmer – that’s the vibe for hospitality bosses across the UK. In fact, a straight‑up survey shows that confidence has dipped for the fifth consecutive quarter, with pressure on operating costs mounting like a kettle on a hot stove.
Where we stand now
Only 33% of leaders feel optimistic about their business over the next year, down from 41% a few months ago. That puts optimism at the lowest point since late 2022 and the second lowest since COVID lockdowns. Independent operators are in the worst spot – only 12% of them are chewing their brains up with confidence.
Look at the big picture: just 14% of all leaders are looking forward to hospitality’s future in the next 12 months – a 6‑point decline quarter‑on‑quarter. The whole industry’s sky doesn’t seem very bright.
Business performance is still solid – but that’s not the whole story
- More than 82% of leaders reported that Q4 trading was either ahead (43%) or level (40%) year‑on‑year.
- Only 31% said they increased profits, while 29% saw them fall.
So even if the numbers look decent, the increasing cost pressure is making leadership feel uneasy.
The real pain point: rising costs
- 47% of leaders say wage costs have significantly increased in the last 12 months, with a further 52% saying wages have gone up.
- Other cost spikes include 79% facing hikes in food and drink, 57% in energy, and 39% in rent.
And there’s more looming on the horizon. In April, employers will face extra labour costs as the National Insurance threshold drops. A whopping 84% of leaders say this will hurt their business in a “very negative” way. Over half are upset by NIC rate increases, and 53% are worried about wage hikes.
It’s a domino effect
According to the survey:
- 64% will need to cancel investment.
- 59% will likely reduce staff numbers.
- 57% will lower employee benefits.
Smaller slices also see possibilities of temporarily halting pay rises, trimming training budgets, curbing trading hours, or even closing sites.
What the experts are saying
“After a strong finish to 2024 and a cooling of inflation, hospitality groups should feel hopeful,” explains Karl Chessell, CGA by NIQ’s director for hospitality operators and food in EMEA. “But the data tells a different story – margins are gasping for oxygen. Entrepreneurs and small businesses, the lifeblood of the industry, are stretched to the max. New payroll costs could force many to cut back on investment and staff, stalling the economic growth the government aims for.”
In short, the industry is looking for a breath of targeted support and a rethink on NIC. Until then, it might be wise for leaders to keep a close eye on their cost slices and not let the sandwich of high wages and rising overheads get too big.
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