December brings an 11.1% boost to sales

December 2023 vs. December 2022

Recent data released from S4labour shows an 11.1% increase in overall sales in December, compared to the same month in 2022.

In London, sales were up 14.2%, whilst areas outside of London saw 10.5% growth year-on-year. Dry-led sites were the driving force behind the overall increase, with sales up 13.9% compared to a more modest uplift of 7.3% in wet-led sites.

Richard Hartley, Chief Growth Officer at S4labour, commented: “In part, this increase is due to the train strikes that took place at the end of 2022, which impacted December sales and left a lower base point. Nonetheless, this consistent growth across the country reflects our industry’s dedication to customer satisfaction, even in challenging market conditions. Christmas has brought a much-welcomed boost to sales, which is a positive start to offsetting costs as operators continue to battle inflation, as well as the upcoming wage increases in April.

Dry-led sites up 9.1% in November, wet-led down 3.3%

The latest data from S4labour reveals that sales were up 3.8% in November, compared to the same month last year. London saw growth of 5.9% year-on-year, whilst the rest of the UK witnessed a slightly more modest increase of 3.2%.  

This overall growth was driven by dry-led sites, with sales surging by 9.1%, compared to a 3.3% decline in wet-led sites.  

S4labour’s Chief Growth Officer, Richard Hartley, commented: “Despite challenging consumer prices, this upward trend is a positive start to the Christmas period. Hopefully, we should see spending considerably up through to the new year, which will help towards offsetting the new wage costs coming into play in April.”  

NLW increases 9.8%, but true cost is 11.5%

According to data from S4labour, the 9.8% increase to NLW announced yesterday by the Chancellor will mean an increase of 11.5% to costs for operators when considering the weighted impact of age distribution in the industry.  

The new wage of £11.44 will apply to employees over 23s, who make up 70% of the hospitality workforce, as well as the 9% of workers who are 21 to 22 years old.  

The statistics also reveal that 14% of industry workers fall into the 18 to 20 bracket, with their new wage rising by 14.8% to £8.60. Under 18s, who make up 7% of the industry’s workforce, will see a 21.2% increase in pay. 

Assuming all workers are paid at minimum wage, these increases will bring hourly labour costs up 11.5% for operators.  

Alastair Scott, CEO of S4labour, commented: “The headline rate at 9.8% was going to be tough enough to manage, without factoring in the high proportion of young people working in our industry. This makes it an even bigger challenge, just when we thought we might be able to get back onto an even keel.” 

Autumn 2023: What do the Chancellor’s announcements mean for hospitality?  

Autumn Statement 2023

Chancellor Jeremy Hunt has today released his Autumn Statement, bringing forward measures on NLW, alcohol duty, business rates and NI that will have an impact on the industry and its workers.

The National Living Wage will see an increase of 9.8% to £11.44 an hour, averaging an additional £1800 a year per full-time employee. This new rate now also applies to employees who are 21 and 22 years old – previously, it was only for workers over the age of 23. Though beneficial for the staff, this rise means a typical pub will see labour ratio hike around 3 percentage points. In addition to this increase, employee NI will drop from 12% to 10%, though employer contributions to NI have not been cut.

The extension of business rates relief is good news, and will help around 230,000 smaller retail, hospitality and leisure businesses in 2024-25. It also seems the Chancellor has listened to calls for alcohol duty to be frozen, meaning there is one less cost for operators to worry about until August next year. 

Chief Growth Officer at S4labour, Richard Hartley, commented: “We have spoken to operators who are currently struggling with labour ratios of 34%+, so this further increase in spend will be challenging, and we anticipate this will put pressure on consumer prices. As wages continue to rise, managing the cost is going to be the single-most important factor in the future success of our industry.” 

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