Confidence in the out of home eating and drinking sector is returning despite mounting concerns about rates, other input costs and Brexit, according to a new survey of 250 senior executives.
At the start of 2017, around two thirds are either very optimistic (10%) or fairly optimistic (57%) about their business prospects in the next 12 months. That’s well down on levels at the same time last year (83%) but up on November 2016 (61%).
Indeed, in the past few months Brexit appears to have dropped down the list of challenges: 51% of the leaders quizzed by CGA Peach and Barclaycard have yet to see the effects to their businesses from last June’s referendum result. Still, 44% said there has been a negative impact already, rising to 56% amongst predominantly food-led companies.
The UK’s divorce from the EU isn’t the only thing keeping business leaders awake at night, however. Three in four (75%) of those in the eating out sector said rising ingredient costs have already had an effect on their business. Falling availability and the increasing cost of vegetables, for example, are examples of the challenges facing the sector.
Costs are increasing elsewhere, too. Business rates top the 2017 survey’s list of the most significant financial challenges facing operators in 2017, with more than half (55%) the leaders very concerned by the issue and another quarter (24%) concerned. Three in five are very concerned (24%) or concerned (35%) about the National Living Wage, too.
“Operators will have to ride out some big challenges in 2017,” noted CGA Peach vice president Peter Martin. “But this is a positive industry that is very much on the front foot rather than in retreat.”