Q2 UK Hospitality Results 

The end of a quarter means another look at industry results and how the restaurant industry fared in the second of the year. As usual, we look at hundreds of sites in London and the South-East to determine these results. They include casual dining, fine dining, quick service, bars, and cafes. 

The results

Across the quarter, we saw like-for-like sales increase by a marginal 1.8% while the number of transactions fell by -0.6% on average versus the same quarter last year. 

April

We started the quarter with what appeared to be a bit of a disappointing April given the fall in sales and transactions year-over-year. However, this was mainly due to Easter falling across the last few days of March instead of squarely in April as it did last year. March’s sales were given some extra padding instead, but that unfortunately benefited last quarter and was to this quarter’s detriment. 

May

Thankfully, May saw a return to form with sales, transactions and ATV all increasing over last year. Despite 2024 returning to the usual 2 Bank Holidays, instead of the 3 we got in 2023 like-for-like sales outpaced the CPI (reported as 2% in May) as well as the the CGA Prestige Foodservice Price Index (FPI) which has fallen to 4.6%. This is great news for restaurant businesses which have been severely impacted by inflation over the last two years. 

Commenting on inflation hitting the Bank of England’s 2%, Kate Nicholls, chief executive of UKHospitality, stated, ‘It’s clear that the economy is heading in the right direction, which should give confidence to the bank that now is the time to begin easing the sustained pressure from high interest rates on businesses and consumers. We need to remember that costs remain high for hospitality businesses and beginning to reduce the cost burden for the sector needs to be a priority for any incoming government.’

June

Sales in June didn’t quite reach the same highs as May, but still outpaced last year’s. This year’s wet and cold weather at the beginning of the month could have impacted the number of transactions we saw with consumers choosing to eat out less but spending more. Unfortunately, it doesn’t look like the beginning of the Euros has had much of an impact across the sector, but with England in the quarter-finals, this weekend is likely to see a big uptick in both pub sales and takeaway/delivery sales. 

The wins and losses this quarter

A quarter jam-packed with Bank Holidays, Q2’s success relies heavily on the unpredictable British weather. Case in point, the Early May Bank Holiday saw sales decrease by 4.8% versus 2023’s Early May Bank Holiday thanks to this year’s cold temperatures and wet weather across the South-East on the Friday and Monday.    

The Spring Bank Holiday saw more of an uptick with like-for-like sales increasing by 3.2%. But where we saw the biggest increase was Father’s Day which happened to coincide with England’s first match of the Euros: like-for-like sales versus Father’s Day last year were up 8.6%. 

While overall numbers are encouraging across Q2, the reality is that sales increases are still not in line with costs. According to a UKH survey at the beginning of the quarter, 70% of venues saw a reduction in profit year-over-year. This has been exacerbated by the 10% increase in minimum wage that came into effect on April 1st.  

What does the future look like

With a summer of sport ahead of us including the final stages of the Euros, Wimbledon and the Olympics, venues showing sporting events can expect to see a big influx in sales. According to GlobalData Retail for the website Vouchercodes, the sector could see a £613.7m boost thanks to the Euros alone. 

Previous Tenzo research has shown that businesses do see a dip in sales in July and August as people go off on their summer holidays, but this will hopefully be tempered by the Olympics and – fingers-crossed – some good weather.   

With a new Labour government likely to come into power on Friday, the industry can expect a reform to business rates coming their way. Unfortunately, despite calls for VAT reform, this has not been prioritised by any of the major parties. We’ll have to wait for the first Budget in mid-September to find out any more. 

As usual, we’ll continue to update on sales, transactions and ATV trends every month on Linkedin. Follow us there for the most up-to-date information!