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Bosses across the pub, bar and restaurant sector expect to see more mergers and acquisitions in the coming months as businesses search for growth in a broadly flat market, CGA’s latest Business Confidence Survey suggests.

The poll of industry leaders, carried out with hospitality technology specialist Fourth, shows half (52%) think there will be increased deal activity in the next six months than in the previous half-year. While 36% think the level of activity will remain stable, just 12% think there will be fewer mergers and acquisitions.

Bosses are keeping a close eye on M&A opportunities, the survey shows, with one in six (17%) actively looking into acquisitions in the next 12 months, and more than a quarter (29%) saying they may be interested if options became available.

Both numbers are down slightly from CGA’s Business Confidence Survey at the start of 2019, but they reflect continued interest in the sector from investors and against the background of major deals being done involving the likes of Wagamama, Costa Coffee, Ei Group and Greene King in the past year, as well as a batch of smaller transactions.

“More M&A activity could be a path to growth for leading operators against a backdrop of weak confidence and flat sales in the sector,” said CGA director Karl Chessell. “The Business Confidence Survey shows that optimism among leaders is currently at its lowest since November 2017, and the joint lowest since the EU Referendum of June 2016, partly because of uncertainty about the long-term impact of Brexit.

CGA’s Coffer Peach Business Tracker, meanwhile, reveals modest underlying like-for-like sales growth for the managed pub, bar and restaurant market against 2018, running at just 1.7% ahead for the 12 months to the end of August.

The CGA Fourth Business Confidence Survey is based on responses from around 130 leaders working at CEO, MD, Chairman, Director or other senior management level. The survey was carried out in August 2019.

The full Business Confidence Survey report is here. To learn more about the Survey and how its findings can help you understand the views and motivations of business leaders across the sector, contact Charlie Mitchell.

     

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