THE licensed trade could be set for a healthy festive season this year, but should be prepared for tough trading in early 2018, new reports have indicated.
Research firm CGA said it expects UK consumers to spend an additional £562 million on drinks out-of-home this Christmas, with 211 million visits expected to be made to pubs, bars and restaurants over the festive season.
It said that, while data from Christmas 2016 showed fewer people visited the on-trade (down 4% compared to 2015), those who did went out more often and spent more money. Sales lifts were observed chiefly in drinks, which were up 4.4% on the previous year.
Phillip Montgomery, CGA’s client director (drinks), said licensees should capitalise on the sales opportunity the holidays afford the on-trade.
He said: “Christmas is a crucial time for operators who need to make sure they are making the most of footfall throughout December by encouraging customers to trade-up with special promotions, new products and exciting, tempting offers.”
However, the good news was tempered by a separate report, from buying firm Lynx Purchasing, which predicted a tough start to 2018.
The firm’s Autumn/Winter Market Forecast said food and drink prices are likely to continue to rise in the new year, with products such as dairy, meat and fruit and veg expected to become more expensive.
It reckons dairy products will have increased 18% in price by the first quarter of 2018, compared to the same period in 2017, with meat up 6% and fruit and veg up 5%.
“Most of the businesses we work with have priced their Christmas menus to take higher costs into account, in the knowledge that there is usually enough trade to go round at the busiest time of year.
“What’s more of a concern is that many of the operators we speak to aren’t giving enough thought to the challenges of the first few months of 2018, when it’s very clear that inflationary pressure is going to continue.”