Confidence among the leaders of Britain's restaurant, pub and bar groups has plummeted in the wake of the vote to leave the European Union, according to research by CGA Peach.
A survey by the business analyst found concerns over consumer confidence, rising product costs and staff availability headed the list of worries for senior executives.
The survey of 80 board-level directors found just 15% of operators are upbeat about market prospects in the next six months, down from the 75% that registered market optimism in January as part of the annual CGA Peach Business Leaders Survey. Just under a third (30%) of operators said they were optimistic about the market over the coming two years, while 40% were pessimistic both for the short and long-term.
When it comes to their own businesses, nearly two-thirds (65%) of bosses believe that Brexit will have a negative effect on their operations. In all, 24% are optimistic for their own business over the next six months, with 37% are optimistic for the coming two years, and 23% are pessimistic both for the short- and long-term, with the rest neutral.
In the January Business Leavers Survey, 83% of operators were optimistic about prospects for their own business in 2016. In the latest survey 44% had decreased business expectations for the rest of 2016, with 53% lowering forecasts for the next two years.
Six out of 10 operators believe that consumers will go out less frequently over the next six months, while 48% think they will spend less when they do visit.
The most cited effects on the out-of-home market of the decision to leave the EU were:
- Increase in the cost of raw materials/ingredients (76% agree)
- Drop in consumer confidence (74%)
- Decreased staff availability (73%)
- Falling of the pound (71%)
- A skills shortage in the out of home market (69%)
Rising raw material costs and falling customer confidence are the leading short-term concerns, with availability of people the number one long-term worry.
27% of operators said they were now less likely to consider an acquisition, against just 4% who said they were more likely, and 21% of bosses planned to reduce investment in their businesses. However, 49% do not plan to change their investment plans, and 5% plan to increase investment, with 25% ‘unsure'.
Charlie Mitchell, head of consumer research at CGA Peach's parent company CGA Strategy, said: "Not a single operator has increased their expectations after the referendum, either in the short or long term."