Hospitality costs hit 12-year high

Hospitality costs hit 12-year high

According to the 2018 UKHospitality Christie & Co Benchmarking Report, controllable costs within hospitality have risen to an average of 52.5% of turnover, the highest in the 12-year history of the report.

Payroll costs now stand at 29.4% of turnover, an increase of 1.5% in 12 months.

Like-for-like sales have risen 1.1%, below inflation.

Margins for food sales remain flat and have declined for drinks since last year.

The report also looks at business confidence ahead of Brexit, with 40% believing that Brexit will have a negative impact on business and one in five reporting that EU nationals have already left the business as a direct result.

“The results of this year’s UKHospitality Christie & Co Benchmarking Report make for sobering reading for eating and drinking-out businesses,” says UKHospitality chief executive Kate Nicholls. “Costs continue to rise for pubs, bars, restaurants and nightclubs.

“At a time of political and economic uncertainty, the government must provide support to help address spiralling costs that threaten the future of the hospitality industry in the UK. Additionally, 40% cent of businesses surveyed reported a hike in their business rates and 20% have reported that they have had to cut staff numbers to address cost rises. The government must immediately commit to reform of a broken business rates system.

“Brexit continues to cause concern for many businesses in the hospitality sector. The effects of leaving the EU are already beginning to be felt by some employers. If the Government wants to make a success of Brexit then action to reduce costs now, to mitigate the impacts of leaving, is absolutely necessary.”