Restaurant and pub operators are being forced to consider the economics of voucher deals, as customers increasingly take the offer without spending on additional courses and drinks.
That's the opinion of PricewaterhouseCoopers's business recovery arm, based on its analysis of the latest insolvency figures from the hospitality and leisure sector.
New figures from PwC showed that there were a total of 1,464 insolvencies in the hospitality and leisure sector in the past 12 months across eight sectors (bars, campsites, gambling, hotels, other, restaurants, sport, travel & tourism). There were 1,304 in the year before.
Despite this rise, hospitality and leisure insolvencies in the third quarter were down 15% compared with the second quarter, and were down 11% compared with the same quarter last year.
Restaurants, bars and hotels continued to battle against low consumer confidence, with the number of insolvencies across most areas of hospitality and leisure dropping between the second and third quarters, apart from sport and leisure, where there was an increase.
Hospitality and Leisure breakdown
2011 Q2: 94
2011 Q3: 71
2011 Q4: 96
2012 Q1: 100
2012 Q2: 82
2012 Q3: 63
2011 Q2: 37
2011 Q3: 45
2011 Q4: 40
2012 Q1: 46
2012 Q2: 58
2012 Q3: 33
2011 Q2: 160
2011 Q3: 156
2011 Q4: 191
2012 Q1: 219
2012 Q2: 164
2012 Q3: 156
David Chubb, PwC business recovery partner and hospitality leisure specialist, said: "Pubs and restaurants have had a good quarter in the fight against the recession. They continue to combat drops in discretionary spend by enticing customers with promotions such as set menu vouchers, happy hours and multi-buy deals.
"However, there are signs that consumers are now expecting this and are farming the offers without spending on additional courses or drinks, which the promotion was priced to entice. Consequently, operators are now having to consider the economics of the special offer strategy.
"We are seeing that parts of the pub sector are coming out of recession and there are some good news stories, but behind the figures it is still very clear that across the sector there are both winners and losers. Under-invested pubs and over-capacity will continue to be issues and consequently further closures are inevitable, but this has a positive impact for the survivors.
"Most of the businesses will be looking for an uplift in performance over the Christmas period and therefore I would expect a further drop in insolvencies in the next quarter. Only time will tell if hospitality and leisure insolvencies continue to decline beyond the Christmas period, but certainly recessionary pressures on leisure spend will continue over the next 12 months. Limited spending is likely to focus on leisure activities with an element of treat and experience but, despite the consumer squeeze, leisure remains a key component of consumer spending."
By Neil Gerrard
E-mail your comments to Neil Gerrard here.
Looking for a new job? Find your next job here with Catererandhotelkeeper.com jobs