Pubs and restaurants were knocked back by low trade over the Christmas period, although rebounding sales in recent days have offered a ray of hope for the beleaguered sector.
Sales in pubs, restaurants and bars were down 60 per cent on Christmas Day on pre-Covid levels, according to data from UKHospitality and CGA.
Transactions were also down 31 per cent on Boxing Day and 27 per cent on New Year’s Eve, compared to 2019 as revellers were put off by Covid fears.
It comes as social spending on travel and eating out increased around 30 percentage points over the first week of 2022, after slumping to nearly half of its 2019 levels over the festive period.
However, many businesses have been left scrambling after a slower-than-expected Christmas failed to bolster cash flow.
UKHospitality said its data highlighted the impact of plan B measures and Covid variant fears on the sector while consumer confidence was also hit hard amid talk of further restrictions.
In the weeks before the Omicron variant emerged, average sales had been recovering steadily through the autumn and were close to pre-pandemic levels (98 per cent), CGA data highlighted.
UKHospitality CEO Kate Nicholls, dubbed last month “dreadfully disappointing” for the industry and said the figures “spell disaster” for the wider economic recovery.
She added: “These sales drops versus 2019, and also against our members’ projections before the onset of the new Omicron variant, will have taken most businesses from healthy trading for the month to painful losses, delaying the sector’s recovery and extending hospitality’s long covid. Cash reserves are severely depleted, and some businesses will struggle to survive the first quarter of 2022.”
The trade group has called for VAT to be frozen at the current 12.5 per cent rate.
Separately, pub operator Mitchells and Butlers (M&B) saw sales slump in the final eight weeks of last year amid consumer fears over the variant.
The All Bar One and Toby Carvery operator said sales dropped six per cent driven by a sharp fall in trade over the crucial festive season in which sales fell 10.2 per cent.
However, Nightcap boss Sarah Willingham was optimistic about rescheduled Christmas bookings.
The Tonight Josephine and London Cocktail Club operator saw waves of cancellations of corporate bookings, as offices were forced to cancel Christmas gatherings as work-from-home guidance was re-introduced.
However, Willingham said the company has been buoyed by these bookings rescheduling for later on in 2022.
“There are a lot of people who run independent bars who will have needed that Christmas. Those two weeks should have been the biggest turnover weeks of the year for the whole industry,” she added.