Tis the season to be jolly…or is it?

This Christmas was supposed to be a time of ‘revenge spending’, as consumers attempted to make up for lost celebrations following the past two years of covid disruptions. However, with energy prices rising and inflation increasing at the fastest pace in nearly forty years, many people are feeling the pinch. So, has this financial slump sent positivity levels plummeting? That's what we aimed to find out in our recent survey.

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We asked our hospitality customers across the UK how confident they were feeling about this year's Christmas trading period, and the results suggest a cautious optimisation with a pragmatic view of the potential challenges. While 30% of respondents are confident or very confident about the forthcoming festivities, the average response was most definitely pitched somewhere in the middle of the confidence scale. So, it seems that while some people are looking forward to a Christmas bounce, others are warier and have tempered their enthusiasm accordingly.

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With media coverage of the current economic situation suggesting that rising prices will leave the UK facing a bleak midwinter, perhaps surprisingly, most respondents predict that this Christmas's revenue will roughly be the same or better than 2019 - so on par or better than pre-covid levels. In fact, only 35% forecast that their revenue would be less.

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As this survey was carried out before the new prime minister's energy support plans were announced, this might seem like an optimistic outlook. Particularly when the GfK UK Consumer Confidence Index reported a record low of -44 in August and the Bank of England has already forecast that October will bring with it a 15-month recession. However, when life is a struggle, people tend to make the most of national celebrations as a brief respite from their woes. Plus, the World Cup being played for the first time in November and December may encourage some festive football get-togethers, depending on how well the national teams are doing.

Conversely, when we asked how much the cost-of-living crisis will impact their Christmas revenues, over 60% said it would have a high impact, with an additional 15% seeing things even more negatively and having a very high impact.

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The results also showed that the main challenges for Beacon customers this Christmas are perceived to be inflationary pressures, decreased customer spend and staff shortages. And it probably comes as no surprise to read that the inflationary pressures that are seen as the most damaging to business are energy and food prices, although wage and drink costs also scored highly.

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So how do businesses plan to tackle these issues to ensure they have a profitable end to the year? The top answer was to increase costs for customers, which can be a difficult balancing act at the best of times but never more than when 'socially consumed' spending is being squeezed. The joint second most popular tactics were to investigate alternative suppliers and change buying behaviour. And this is obviously where Beacon can help. Our team can work with you to help you understand where your margins are being eroded so that you can take action to improve them. Where we can't instigate cost reductions due to unavoidable market forces, we'll look to provide you with solutions in the areas we can influence to help reduce your overall cost burden.

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Our final question asked what the key factors affecting customer decision-making will be this year, and price and perceived value were each chosen by over 82% of respondents. This makes total sense, as in periods of economic anxiety, Brits tend to trade down or shop around for the best deals. Therefore, this Christmas more than ever, it will be vital to ensure you offer competitive pricing as well as value for money. However, this needs to be done whilst also keeping an eye on quality and offering a festive experience, which were also popular factors. After all, what's Christmas without a little bit of magic?

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It is clear from the survey that businesses are aware of the challenges they face this Christmas but remain cautiously optimistic about the festive period. The main issues they face are ones largely beyond their control such as inflation, but they are hopeful that people will still want to celebrate and make the most of the season despite the financial difficulties many are facing.

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We would like to say a big thank you to everyone who took the time to participate in the survey. Your feedback is essential in helping us to improve our service and we really appreciate your input. We know that it’s a precarious time for many of our customers, so we want to assure you that we will be working hard throughout the rest of the year to provide all the support you need to maximise your profits. Even if savings are difficult to find in categories like Utilities, we can look across your entire P&L, and help you unlock savings in other areas which will help mitigate some of these rises. So, if you have any concerns or questions, please don't hesitate to get in touch.

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As a thank you for taking part in the survey, we entered all relevant respondents into a draw to win a luxury hamper jam-packed with tasty treats, naughty nibbles, and a bottle of bubbly too. After using a random number generator to pick the winner, It gives us great pleasure to announce that Alison from Boship Lions Farm Hotel will be the recipient of the prize. Congratulations Alison, your hamper will be winging its way to you shortly.