Hospitality sales in the UK grew by 2.2% year-on-year in 2024, according to Hospitality Data Insights (HDI) card spending data, which tracks the site-by-site spending of 10.2 million people across 140,000-plus venues. While this growth is encouraging, it lags behind the consumer price index inflation rate of 2.5% for the same period, underlining the ongoing pressures faced by the sector.

One bright spot in 2024 was the easing of price inflation after the cost-of-living crisis, which saw sharp price increases. At the start of the year, HDI’s data showed main course prices in managed pubs and bars had risen by 21.1% over two years, while drinks were up 16.7%. By December 2024, price inflation had moderated to 3.7% year-on-year in managed pubs and bars and 3.2% in the quick service restaurant and coffee sectors. However, with inflation in hospitality still outpacing the economy overall, challenges persist.

Adding to these pressures, the October Budget brought significant cost increases. From April 2025, UKHospitality estimates the sector will face £3.4bn in additional costs due to payroll and business rates changes. For many operators, these headwinds compound an already difficult environment.

Despite these challenges, recent data provides reasons for cautious optimism. Hospitality sales grew by 3.9% in the four weeks ending 31 December 2024, buoyed by a strong Christmas period. Growth trends also improved across the 12-week period, with positive performance seen in England, Scotland and Wales, and London returning to growth after struggling for some time.

Encouragingly, there are no shortages of success stories across the sector. From large brands to independent operators, winning businesses share some common traits. These include a deep understanding of customers, competitors and local markets, combined with clear brand propositions and operational excellence. Increasingly, businesses are leveraging data to gain insights to drive their business, with tools like card spending data helping operators track performance. It helps them effectively understand their customers and competitors and make smarter decisions, ranging from site selection to offer development and customer marketing.

As operators brace for significant cost increases in April 2025, pricing will be a critical area of focus. Recent years of steep inflation have left many questioning whether customers will tolerate further price increases. However, with costs rising, businesses must optimise pricing to ensure profitability without alienating customers.

A data-led approach to pricing is increasingly becoming the norm. Understanding the customer profiles of individual sites and their positioning relative to local competitors can help operators assess price sensitivity and adjust prices accordingly. HDI’s data has shown that some operators have adopted simplistic “one-size-fits-all” pricing strategies across their estates, while others have taken a laser-focused, data-driven approach to tailor prices site by site. With the financial pressures of 2025, businesses that embrace the latter approach will be better positioned to protect margins while retaining customer loyalty.

2024 showed the hospitality sector’s resilience and adaptability, but the road ahead will demand even greater focus on innovation and data-driven decision-making. Operators must prioritise understanding their customers and local markets, optimising pricing strategies and leveraging actionable insights to stay competitive.

By embracing a data-led approach, businesses can identify opportunities, minimise risks and maintain their relevance in a rapidly evolving landscape. With the right strategies, the sector can not only navigate the challenges of 2025, but also lay the foundation for sustainable growth in the years ahead.

I’m sorry to have to tell you that, if you’re employed in licensed hospitality, you are complicit in the habitual consumption of a poisonous substance on a massive scale. It’s true. Alcohol, or at least acetaldehyde, which is produced when alcohol is metabolised, is harmful to the human body.

Yet most of us insist on continuing to drink it, and human beings have done so for a very long time. For influential medical journal The Lancet, though, that’s no excuse. An article published towards the end of last year wrestled with the question of why alcohol is so “normalised” in Europe.

Converting the adjective “normal” into a verb is significant. It implies that some process is going on to ensure that we keep drinking against our better interests. Someone or something is actively “normalising” a behaviour that would otherwise simply wither away.

The Lancet comes up with three potential explanations. One is a lack of awareness of alcohol harm, which means we need even more noise on the matter from public health. Another, and you’ve probably guessed this, is that drinks industry marketers are to blame. It’s the third reason, though, that’s the most interesting and the most persuasive: “Alcohol is often perceived as an important part of traditions, celebrations and social rituals. The cultural acceptance of alcohol use is passed down through generations, making it an almost unquestioned staple of social interaction.”

Leaving aside the qualification “perceived”, this rings true, and it’s a knotty problem for those who’d like to “de-normalise” drinking. The Lancet argues that “the persistence of a practice doesn't justify its continuation – just because it has been ingrained in society for generations, doesn’t mean cultural norms cannot change”. And of course, there are some communities that don’t drink – that have different norms. Even so, it’s hard to imagine a world without alcohol.

I’ve just finished reading Jonny Garrett’s new book, The Meaning of Beer, which takes through, in entertaining fashion, the ways in which beer, from the earliest civilisations, has played a crucial role in scientific discoveries, politics and the wider culture on a global scale, leaving a permanent mark on human society. Garrett concludes by speculating that brewer’s yeast may yet have a further part in future advances. By the end, you get the feeling that if you take away beer, nothing in the past 10,000 years or so would have happened in the same way and we’d be in worse place without it.

Ray Bradbury wrote a short story called The Sound of Thunder, in which time tourists travel back to a Jurassic forest and accidentally squash a butterfly. When they return to the future, it’s not as they left it. An horrific regime is in power.  The Meaning of Beer is a fascinating read, but to conclude from it that beer is necessary to civilisation would be a philosophical fallacy. Probably. Anyway, I think there’s a better argument for alcohol.

Earlier this month a couple of leading thinkers in the field of drinking studies, James Nicholls and Geoffrey Hunt, published a challenging paper titled: “Taking pleasure seriously: Should alcohol research say more about fun?” The challenge was aimed at public health advocates who are “bemused as to why anyone would even want to drink or get drunk… treating the pleasure of intoxication as if it were a pathology, with no authentic value for drinkers”. The majority of the population must be mere dupes in the sway of manipulative marketing.

But what if mild intoxication really is fun, and not just a figment of the advertisers’ imaginations? What if it brings social benefits, helping to bring people together, as it has done since the agricultural revolution forced humans to settle in one place, put up with other people and share nicely?

You could argue there are other means of achieving this, and indeed, people do get their pleasure and socialise in different ways. Yet most of us are still reach for alcohol when there is something to celebrate, when we meet friends – and strangers – and simply when we want to relax and make the switch from productive work to pointless play.

Alcohol is never just alcohol, the toxic substance. Drinking has deeper meanings for us beyond the grasp of narrow pathologising and sensible advice. Perhaps its value lies for us in that unnecessary excess itself, that temporary pampering of our irrational selves subdued by the working day. We’re only human, after all.

It’s that time of year when managing and reducing costs really comes into focus as we battle to survive the drop in sales. It’s always been like that at the start of the year, but this year we have even more pressures with the onslaught of rising costs that we’re all facing.

 

Alistair Scott talked last week about squeezing every last drop out of labour costs, which is an area that most operators have done to death already. But also, most of the choices with labour come with the caveat of not overly compromising the guest experience – it’s a really tough balance. So, what’s likely to be the area where we can make the best savings that aren’t going to impact on our guests?

 

Well, energy and water are likely to be the next largest operating costs for most businesses, and they’re probably the one that has the least amount of focus relative to its cost. A lot of people often think that saving energy involves spending large sums of money on new technology, and yes, that is an option. But before you do that, let’s make sure that you’re doing a great job managing all of the basics.

 

Depending upon the size of your business, a typical pub or restaurant could be spending between £500 to £2,000 per week on utilities, and small changes can make significant savings. So where should we start? Here are some of the areas where we find the quickest wins at the start of a new year:

 

Firstly, let’s make sure that everything we used to ensure we delivered a great Christmas is now off if we don’t regularly need it. Are function rooms and any other additional trade areas that you used for Christmas and new year fully switched off? This isn’t just heating and lighting, but other equipment like fridges, which should be off and the contents transferred to other units.

 

If you’re reducing your trading hours or even closing on some days, then make sure you change any time clocks accordingly. You’ll often find these on kitchen ventilation, lighting and your heating systems – you’d be surprised how many kitchen extract systems are running when no one is on site.

 

Then have a look at your pre-trade start up. If you’re expecting trade to be slow and your chefs normally start at, say, 9am for midday service, then seriously consider how much prep really needs to be done in advance for a quieter session. Starting an hour later will reduce both labour and energy costs. Equipment like your ovens and fryers could be costing you £10 per hour, so only turn them on when you really need them. This could make the difference between a profitable trading session or losing money. 

 

Then, during trade, if you have more than one of some appliances, do you really need them both on? Fryers might be tricky due to segregating products, but ovens are a classic example when two will get turned on just because they’re there rather than because they’re both needed. The same goes for dishwashers and glasswashers. Also with these, don’t turn them on until the first trays are full and need to be washed.

 

After service has ended, it’s time to make sure that nothing is left on overnight. This may seem really obvious, but we regularly see equipment running overnight that could be off. This could include lighting, extraction fans, heating, coffee machines and a lot more. Walk the business just before you leave, listen for equipment running and look for power lights on.

 

And let’s also not forget about water. Most people don’t have a clue how much water costs – if you left a beer tap running, you’d soon work out how much that was wasting, but a running tap? One of my colleagues last week found a tap in the staff toilet that wouldn’t shut off properly. Apparently, it had been like that for nearly six months because the venue didn’t want to spend the £75 the plumber had quoted to fix it. The flow of water filled a pint glass in 30 seconds – that’s the equivalent of about £700 per year. The venue got it fixed the next day! While we’re thinking about water, make sure you regularly check your urinal flush control devices. If these are broken, then it could be costing thousands per year.

 

Finally, make use of your energy consumption data. Most sites will have half hourly consumption data for electricity, and maybe gas. Monitor this proactively just like you would with any other business data. Look for consistency of consumption relative to sales, compare similar sites and share this information with your teams. It’s hard to drive change if your team can’t see the benefit of their actions.

When considering where to go for a family meal as part of the celebrations for my daughter turning 18 this month, we had considered returning to a long-time favourite for our celebratory occasions – Locanda Locatelli in Central London.

 

This option was removed when I caught the news that the Italian restaurant had closed its doors after 23 years of trading. I mentioned this to my daughter, who seemed genuinely disappointed. That her response almost bordered on bereavement got me thinking about the place and how certain establishments ultimately become more than just a place where you go for a meal. 

 

I first took my daughter to Locatelli’s when she was around five years old as a celebration of her starting school. She fitted in very well, especially as the Italian team all called her princess. I knew I had a decent long-term dining companion when I told her I was uncertain about selecting a glass of red or white and she suggested pink as it’s between the two. Genius. Why didn’t I think of that?

 

Things turned a little tricky when the chef came out from the kitchen ahead of desserts and asked if she would like to personally choose a flavour of gelato from in the kitchen. As she toddled off, I couldn’t help but think that this rather went against that rule I recalled from my school days of not wandering off with strangers who offer you sweets or ice cream.

 

After this successful lunch, we returned for various other special occasions, including one memorable dinner when I was a tad non-plussed about being seated on the periphery of the room, near the bar area. This turned to puzzlement as I watched a well-built suited gentleman intently watching bottles being opened and poured for a certain table’s order.

 

As I took a walk to the toilets mid-meal, the reason for the seating arrangements and bottle-watcher became obvious as I passed by a group dining on the corner tables. It included Prince Charles, Camilla and Princes William and Harry, along with partners and other family members enjoying dinner out like any other family grouping.  

 

This not only explained the security guy checking their drinks, but also the very discreet individuals with earpieces stood outside each of the restaurant’s doors. Clearly, security had Googled my credentials and found a journalist who was not regarded as a threat but thought it best to stick him and his family well away from the royal group.

 

Despite this slight, I returned to Locatelli’s for a number of other celebratory meals as it always delivered what we were after. Its Michelin star ensured the food was of a decent standard, but it was focused on standard Italian dishes rather than tricky, fiddly food. This meant any occasion at the restaurant was not hijacked by the food taking over and diners suffering the constant interruptions from servers telling them in great detail about each dish’s infinite ingredients. 

 

Locanda Locatelli was fundamentally about straightforward hospitality, with the food delivered by a quintessential Italian, Giorgio Locatelli, and his wife, Plaxy. My attraction to the restaurant began after seeing Giorgio on TV in a series with Tony Allan, who founded the Fish! restaurant in Borough Market. I liked the cut of Giorgio’s jib and calves’ liver, and I enjoyed a 20-year journey of enjoyable meals at his place. Although during one dinner, we accidentally set fire to a bread basket via extremely long bread sticks.

 

The last time I saw the chef was during covid-19, when he was sat with his family dining outside the restaurant on a sunny early evening. It was a sight that reflected the family vibe that he’d created at the venue, even though it had always attracted its fair share of A-lister celebs and royals. This was at the heart of what attracted me and my family. I wish him well in his next endeavours and thank him for all the memories. 

 

Apologies that this column has simply been a list of anecdotes, but that’s just what good restaurants do. They become more than places where you just go for a meal. They play a part in diner’s lives, and we grow up with them.