Christmas — normally the busiest period for UK restaurants, bars and pubs — has been the source of little festive cheer for the hospitality sector in recent years.
A last-minute lockdown to stop the spread of Covid-19 in 2020, a new viral variant 12 months later and a series of train strikes last year have undermined the last three festive trading periods, traditionally a key part of what is billed as the “golden quarter” by industry executives.
But Martin Williams, chief executive of Rare Restaurants, owners of steak chain Gaucho, said this year was different. It has “not been very golden” since coronavirus hit, he explained, but this time “Christmas has got off to a bang.”
Table bookings for December across Rare’s 23 sites nationwide were up by 21 per cent, compared with last year, as of early December, Williams said.
Will Beckett, co-founder of rival steak chain Hawksmoor, said his restaurants were “heaving” at the moment, with bookings up as much as 30 per cent on last year.
In trading updates in recent weeks, Fuller’s and Marston’s, two of the UK’s biggest listed pub groups have both reported strong Christmas performances well ahead of last year.
There were early signs of industry bullishness when three-fifths of hospitality executives said they were optimistic about Christmas trading, according to a business confidence survey in October by industry tracker CGA.
In another positive sign for larger players in the sector, separate CGA data published on Wednesday showed sales in managed pubs, restaurants and bars across the UK rose by 4 per cent year-on-year last month, up from a 3.2 per cent increase in October.
Rob Pitcher, chief executive of Revolution Bars Group, said the adoption of hybrid working by many employers had led to them viewing Christmas office parties as a means to bring colleagues together, resulting in a rise in corporate bookings. “The larger corporates are coming out and booking those Christmas functions again,” he said.
“Bosses are thinking that with hybrid working, teams aren’t together . . . and when they do get the team together, we need to make sure that the whole team is here, and Christmas is the perfect opportunity for that,” he added.
While the large restaurant and pub chains are bullish about maximising profits this year, some smaller businesses were more apprehensive going into the festive season. Almost a quarter of independents told the CGA survey they were pessimistic about Christmas, compared with just 8 per cent of executives at bigger groups.
Kate Nicholls, chief executive of trade body UKHospitality, said that it was “a matter for viability” for smaller operators to pull in the punters in the run-up to Christmas given the cost of living crisis.
For Matt Todd, who runs the Wonston Arms, an independent pub in the village of Wonston in Hampshire, this crucial period was inspiring as much nervousness as seasonal cheer. “I need the Christmas trade to arrive big time and not just on Christmas Eve,” he said, explaining he had little visibility over demand as he relied on walk-ins.
“My nervousness is that can I make enough of this Christmas, can we get enough of the traffic to deliver the big month that we need so we can make it through the hangover of January and February,” he added.
Unlike the bullishness from the bigger restaurant groups, Tony Rudd, the patron chef of the Copper & Ink restaurant in south-east London, said December bookings had disappointed and were 30 per cent down on last year.
“We have less of the traditional Christmas party bookings,” said Rudd. “Many hospitality businesses have been struggling all year, but hanging on in the hope that the Christmas trade might sustain them for another few months, but sadly it looks gloomy.”
Costs remain high, despite energy and food price inflation abating in recent months. The latest official figures show food and drink inflation fell in October to 10.1 per cent, down from a peak of 19.1 per cent in March, according to the Office for National Statistics. More recent data from the British Retail Consortium suggested prices could fall further in November.
Yet those signs of relief are offset by an increase in the minimum wage in April, which will add to the wage bills for pubs and restaurants.
“2023 has been a year of cost pressures,” said Charlie Gilkes, who runs the Inception Group of bars and restaurants. “We’re seeing some improvements [in input costs] but I don’t think it’s time to celebrate. The big question in all of our minds is what happens to sales and what happens to consumer spending next year.”
Like other larger chains, Gilkes said his 14 venues across London, which include the Mr Fogg’s bar brand were busy. Event bookings for December are 10 per cent ahead of this time last year, with strong demand from both corporate and private clients. He added that there was little impact from the limited train strikes last week, compared to Christmas 2022.
But the fear is that after splashing the cash in the run-up to Christmas, consumers will tighten their belts even more dramatically than usual early in the new year.
“I think January and February are going to be awful,” said Alan Morgan, chief executive of the Big Table Group, which owns Bella Italia and Café Rouge. “People are feeling the pinch . . . and there is no evidence that Christmas spending is slowing so history suggests it will bite straight afterwards.”
It is the smaller operators that are expected to bear the brunt, according to Beckett. When he walked around London’s Soho district at lunchtime last week, he saw several independent restaurants “that didn’t look busy at all” and at least four that were closed.
“As with quite a lot of things at the moment in hospitality, the pain falls very unevenly,” he said.
