Bad news for UK’s high streets

After solid growth of 4.2% in a sunny April, trading last month was weakened by cooler and wetter weather in many parts of the country, the latest CGA RSM Hospitality Business Tracker shows.

The tracker, which was published on Thursday (19 June), shows pubs outperformed other channels for the sixth month in a row. Pubs’ sales were 0.5% ahead of May 2024, while restaurants dropped 2.5%. Sales in bars finished 5.1% down year-on-year, and the on-the-go segment fell 2.5%.

For the fourth month out of five, trading outside the M25 was slightly stronger than in London. Groups’ sales inside the M25 in May were down by 2.3% year-on-year, but further afield they were only 0.4% behind.

May’s total sales through all channels, including at venues opened by groups in the last 12 months, were 1.6% ahead of the same month in 2024. However, this is still below the UK’s recent rate of inflation, as measured by the Consumer Prices Index.

“May’s Tracker numbers extend the pattern of a reasonable 2025 for pub operators but a challenging one for restaurants and bars, ” said Karl Chessell (Director – Hospitality Operators and Food for EMEA at CGA by NIQ).

“They are particularly concerning in the context of major increases in staff costs from April, and the Chancellor’s recent spending review brought little to reduce the heavy burden on hospitality businesses. Groups will be hoping for better weather to loosen consumers’ spending in the crucial Summer months, but the trading environment is going to remain very challenging for the foreseeable future,” he said.

These concerns were echoed by Saxon Moseley (Head of Leisure and Hospitality at RSM UK), who noted that fragile consumer confidence continues to weigh on the hospitality industry.

“With cost pressures showing no signs of reducing, the situation is increasingly desperate for some. Given this combination of sluggish discretionary spending and high costs, we are seeing a number of operators actively looking to expand internationally where trading conditions are more favourable.

“Unless these challenges ease over the summer, this could lead to less domestic investment and longer-term stagnation for the UK high street,” said Moseley.