A cautious return to trading as 84% of hospitality sector leaders indicate uncertain consumer demand is the key concern

New Business Confidence Survey from CGA and Fourth indicates widespread anxiety but signs of guarded confidence as restaurants, pubs and bars welcome back guests 

Managed pubs, restaurants and bars are planning a gradual re-opening starting this weekend, although operators are feeling both cautious optimism and anxiety about trading levels, according to the latest Business Confidence Survey from CGA and Fourth.

The findings reveal that 59% of businesses in England plan to reopen some sites this Saturday [4 July], while a further 18% intend to open during the following week. But, on average, operators plan to open only three in five sites during the first week back, and just a quarter (25%) plan to open all their sites initially.

When asked about reopening, consumer demand was found to be the primary concern for business leaders, with 84% listing it as their biggest or major worry. City and town centres also pose a challenge, with 75% of respondents expecting consumers to be reluctant to visit them post lockdown.

 “After more than three months in lockdown, operators will be looking forward to welcoming customers back from this weekend, and the government’s reduction of required physical distancing to one metre has provided a significant boost,” said CGA group Chief Executive Phil Tate. “But excitement has to be tempered by huge uncertainty about consumer attitudes and trading, and it’s little surprise to see concerns about redundancies, closures and profits. While it’s pleasing that confidence is seeping back into the market, businesses will be anxiously waiting for the ‘new normal’ of eating and drinking out to emerge.”

Despite 83% of leaders stating they have confidence in their supply chain, the majority of businesses will reopen with reduced menus, with 82% of respondents stating they were cutting back food menus to core options, and 41% indicating they will be stripping back their drinks menu, with cocktails being the hardest hit category.

James England, Senior Vice President, at Fourth, said: “It’s incredibly positive to see sites reopening across England after receiving the green light from the Government. Understandably, there are concerns around the level of consumer demand, particularly in city-centre locations, where a number of support industries and office workers continue to work remotely. While it’s positive to see such strong confidence in the supply chain, we are actually seeing a bumpy ride ahead for operations as the supply chain remobilises under such challenging circumstances, which can only be lessened through proactive discussions with suppliers around revised menu item availability and delivery slots.

The exclusive Business Confidence Survey also reveals the scale of concern in the sector regarding site closures and job losses, with 67% of industry bosses believing they will have to lay off staff, rather than bringing them back from furlough – on average they anticipate cutting a fifth (21%) of their workforce. 

Fears of widespread site closures also remain, although they have eased from earlier in lockdown. Now 43% of leaders expect not to permanently close any sites, up from 37% in April. On average, the data suggests that some one in 12 sites may remain closed for good.

But the survey points to some recovery in business confidence. The last poll in April found that a record low of 15% of leaders were optimistic about their business’ prospects over the next 12 months, but three months later that figure has doubled to 32%. The proportion feeling optimistic about the market in general has risen too, from 5% to 16%. However, both figures are still barely half the level of 12 months ago, which were at 58% and 30% respectively. 

The survey also reveals that rent negotiations remain the most pressing challenge, with operators having only modest confidence in the government’s new code of practice for tenant negotiations.

Looking at the long-term impact of Covid-19, 44% of business leaders expect an increase in home delivery frequency post lockdown, with 55% listing delivery as a revenue stream they are prioritising. 51% of the respondents indicated that technology, in particular ordering apps, would be a priority for businesses moving forward.

The CGA Fourth Business Confidence Survey is based on responses from 100 leaders working at CEO, MD, Chairman, Director or other senior management level. The survey was carried out in late June 2020, closing on 29th June, days before the earliest date the sector has been permitted to reopen.


About CGA:
CGA is the data and research consultancy of choice for the out-of-home food and drinks market, specialising in market measurement, consumer research and location planning. What sets CGA apart is its unique ability to access the three key types of data (supply, demand and consumer) and then triangulate this data to provide the most complete and accurate picture of anyone in the out-of-home sector. From its offices in Manchester, United Kingdom, and Chicago, United States, CGA experts work with many of the world’s biggest consumer brands, including drinks manufacturers, consumer brand owners, food suppliers and wholesalers as well as pub, bar and restaurant retailers and government entities. Founded in 1992, CGA’s mission is to use its phenomenal data and expert insight of the leisure industry to give these brands the competitive edge, and get them where they want to be, faster. To learn more, visit: www.cga.co.uk.

About Fourth
Fourth provides end-to-end, best-in-class technology and services for the restaurant and hospitality industries. Their procurement, inventory, and workforce management solutions, coupled with the industry’s most complete data and analytics suite, give operators the actionable insights they need to control costs, scale profitability, improve employee engagement, and maintain compliance. Since its merger with US-based HotSchedules, Fourth serves more than 7,000 customers across 120,000 locations globally. Fourth works with multi-national companies in the hospitality industry, including Fullers, Gaucho, Hilton, Krispy Crème, Leon, Café Nero, Soho House, Subway, Strada, Wagamama and Stonegate. For more information, please visit www.fourth.com. 

Want to learn more about the results of this survey? Watch the webinar that was recorded earlier this week!

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