Outlook for 2024 Remains Positive for the UK Restaurant and Pub Industry according to Christie & Co
The UK hospitality sector remained resilient from a trading perspective and the outlook for 2024 remains positive, off the back of increased activity in the latter half of last year and the promise of lower inflation and lending costs this year, which should help to unlock the transactional market.
After starting to see business return towards more normalised levels following the pandemic, 2023 stuttered on the back of high inflation and increases in interest rates.
Whilst this didn’t have an immediate impact economically, it did lead to a slowdown in transaction volumes and decrease in average prices of hotel, pub and restaurant businesses in our annual price index for 2023.
Nonetheless, the UK hospitality sector remained resilient from a trading perspective and the outlook for 2024 remains positive, off the back of increased activity in the latter half of last year and the promise of lower inflation and lending costs this year, which should help to unlock the transactional market.
Whilst the UK pub sector continues to demonstrate resilience, parts of the transactional market remain challenging due to the interest rate hikes and stubborn inflationary environment during 2023, and pricing will need to adjust further to fully unlock the market. This resulted in a -8.1% drop in Christie & Co’s pub price index for 2023.
Nonetheless, the volume of transactions, deals agreed, and exchanges were all ahead in H2. This increased level of activity in the latter half of the year suggests that we should see a more dynamic market in 2024.
Several key trends are currently shaping the market, which we detail in the report. Most notably, corporate buyers are back in the market, 86% of Christie & Co pub sales were sold for continued to use, and cash remains king.
The UK restaurant industry has been undergoing a period of transformation in recent years, driven by pre-covid over expansion, challenging trading conditions and changing consumer dining habits. These factors continued to significantly shape the sector landscape and transactional activity in 2023, resulting in a negative 5.3% movement in Christie & Co’s restaurant price index.
Christie & Co sold a total of £6.75m worth of restaurants in 2024 and 85% of sales were leases. In addition, the franchise market experienced increased activity, and the team assisted several key domestic and international market players with both franchisor disposals and franchisee searches. This included Sushi Shop, Chozen Noodles and international brands, Carl’s Jr, Paulaner and Bonchon, who are looking to enter the UK market.
Read the full report here.