Hospitality sector cheers craft drinks in year of growth

● Craft beer and spirits drive growth as rural pubs outstrip rivals for first time

Scotland’s licensed trade sector has enjoyed a positive year capped by strong festive sales, despite economic uncertainty caused by Brexit, new figures suggest.

Almost two-thirds (64 per cent) of hospitality businesses reported that they were either “growing” or “stable” throughout 2019, according to the latest market review by the Scottish Licensed Trade Association (SLTA).

This comes despite close to half (47 percent) of outlets stating that Brexit-related uncertainty had negatively impacted their business, while zero outlets reported a positive impact from the political fall-out.

The S LTA highlighted an “encouraging” performance from rural outlets, which performed ahead of the market for the first time during Christmas and New Year, with 50 per cent citing a stable performance and 33 per cent in growth. Three-quarters of total hospitality businesses recorded trade as being stable or growing over the festive season.

Spirits and craft beer helped to drive up performance, with sales up 89 per cent for Christmas and New Year versus the same period in 2018, while 33 p er cent of outlets rep or ted “significant” growth in food sales.

Colin Wilkinson, man aging director of the SLTA, said: “2018 was a buoyant year for the sector with the World Cup and a hot summer, so it is encouraging to see that so many of our member retailers performed well at Christmas and New Year and throughout 2019.

“In addition, it is encouraging to see retailers evolve to meet emerging market trends, with more and more retailers supporting small, local producers and 85 per cent of our members stocking craft beer and spirits.”

On-trade retailers now see government legislation, at both national and local level, as the biggest challenge facing their businesses. The review found a significant increase this year in concerns over rates and the legislative impact of staffing costs.

Retailers expect to see continued growth in food for the year ahead, particularly in healthier options, as well as in online bookings, craft beverages and experiential offers such as drinks tastings.

Traditional “wet-led” pubs and the use of cash as a means of payment are expected to decline. The S LT Are view, sponsored by KPMG, is based on quantitative research from 500 outlets across Scotland.

Alistair M cA lin den, head of hospitality and leisure for KPMG in Scotland, said: “The stability and growth being reported are testament to the tireless efforts of operators to enhance and diversify their offerings in what continues to be a challenging and uncertain market place.

“As we enter a new decade – and while challenges will, undoubtedly, persist – the sector should, quite rightly, take great pride in the innovation and resilience which continues to be displayed by operators.”