S4labour downgrades hospitality sales forecast in December to -45% in wake of toughened tier restrictions.

S4labour have undertaken research to help operators forecast sales as lockdown 2.0 comes to an end and England and returns to the tiered system. Originally the research showed a relatively optimistic outlook, with the pre lockdown bounce indicating strong consumer confidence, however the recent announcements regarding a toughening of trading conditions for the majority of operators has significantly dampened the forecast.  

The research undertaken by S4labour has analysed a range of data sets including historic December sales uplift, the Welsh post lockdown experience as well as the impact of the three tiers on trading.

During any normal December, we would factor in a circa 40% month on month uplift in sales, however, for the majority of operators this year, the work parties and general public splurge requires a significant down forecast.

Welsh operators enjoyed a 60% uplift in sales coming out of lockdown 2.0 compared to pre lockdown trading, a figure that would have indicated operators across the rest of the country could be optimistic about the easing of Lockdown 2.0 next week. However, with Wales emerging from its lockdown in conditions similar to England’s tier level 1, few areas in England will see anything like this growth.  

By looking at the historic impact of the tiers on sales, and accounting for the increased restrictions in each tier, S4labour has concluded that operators in tier 1 could forecast a December that is 50% up on October sales this year, but still 25% down on December 2019. Those in tier two, whose trading conditions are much like those in the previous tier 3, can forecast sales that are up 10% up on October sales this year, down 45% on last year. However, those leaving lockdown and entering tier 3 are unlikely to see any month on month growth from October this year, with only a marginal uplift on November. For many operators in tier 3 opening will not be feasible, but for those who do, it is possible that they will see an 80% decline in yearly like for likes.

Chief Product Office Richard Hartley commented: “The lockdown 2.0 was bitter pill to take for many operators, but for many, there was an optimisms that we would emerge into a Christmas period with significant demand. The additional restrictions on trade and the volume of operators who are in tiers 2 and 3 have quickly evaporated any hope of a buoyant end to a terrible year for the industry.”

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