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Hospitality sector sees biggest trade rise since 2007

29 | 05 | 13

The UK food service sector has been through the mill in recent years, as restaurants, bars and hotels struggle to attract enough custom. 

Part of the reason has been that tourist numbers have been affected by the recession, while families are cutting back on their expenditure in an effort to make ends meet each month. 

This has led to a rise in the popularity of supermarket luxury meal deals, as families are viewing them as a more affordable alternative to dining out. However, the latest Confederation of British Industry (CBI) quarterly Service Sector Survey shows that it isn't all doom and gloom.

Indeed, the report discovered in that in the three months to May, the hospitality sector saw business volumes rise at their fastest pace since August 2007 and this helped the overall profitability of consumer businesses to rise for the first time since November 2007.

This is certainly positive news for the sector and if these types of results can be sustained, expansions and development will be a real possibility within the sector. If this is the case, eateries will have to decide on what commercial kitchen appliances they want as they look to appeal to customers.

Overcoming testing conditions 

Stephen Gifford, CBI director of economics, admitted conditions "remain tricky", as consumers are still "grappling with a squeeze on real incomes and business confidence vulnerable to any adverse developments in the global economy". However, he does see many reasons to be cheerful. 

"What's promising is that consumer services have seen growth in activity and expect this to continue pointing to a greater willingness from people to go out and spend. But there is concern around getting access to finance, so it’s vital that growing firms look at the full range of funding options out there on the market," he added.

This brings a serious issue into focus, as restaurants will struggle to expand if they cannot get their hands on finance. Just like many other sectors in the UK, access to credit is one of the major roadblocks to being successful. 

For example, many eateries are in need of a significant revamp, but do not have the funds to buy new kitchen equipment. However, if banks were to relax their lending policies, significant investments could be made. 

The future's bright 

Peter Backman, the managing director of Horizons, recently said the hospitality sector should be expecting to see growth in the coming months and years. In 2012, total food and drink sales were at £44.1 billion, which represents a 0.4 per cent reduction once inflation was accounted for.

"Many operators have responded to trading challenges by looking at new opportunities and serving food throughout the day. The real winners have been snacking and the breakfast market. We think the two will grow considerably over the next few years," he stated.

Restaurants should not be afraid to diversify their offering as they seek to attract more customers, as trying out new things could be the best way to attract additional custom. ADNFCR-16001031-ID-801591615-ADNFCR

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