Hospitality among top contributors to UK economic recovery, says ONS

The re-opening of hospitality businesses helped the UK econony grow by 4.8% in the first half of 2021 according to Office of National Statistics (ONS) data | Photo credit: Artur Tumasjan 

---

The UK’s Office of National Statistics (ONS) has highlighted the strong contribution of hospitality businesses to the UK’s ongoing economic recovery. According to the government body, the re-opening of the hospitality industry helped the UK economy grow 4.8% in the second quarter of 2021.
 
In its monthly report on the health of the UK economy, the ONS said food and beverage services had been the ‘main contributor’ to growth in UK consumer-facing services in June 2021, with output growing 10.1%. ONS data shows UK GDP increased 1% in June 2021, an increase on 0.6% recorded in May – its fifth consecutive month of growth.
 
Hospitality businesses have also reaped the benefits of the first full month of indoor dining services since Covid-19 restrictions were eased on 17 May, the ONS reported. “Continued strong growth means that the industry is now only 1.5% below its pre-pandemic level (February 2020), and 9% above its August 2020 peak when the Eat Out to Help Out Scheme boosted consumer demand for bars and restaurants,” the ONS wrote.
 
The recovery is testament to the resilience of the UK hospitality industry, which has been particularly hard hit by Covid-19 lockdowns, trading restrictions, and social distancing measures.
 
ONS Data shows just under 1.65 million hospitality employees were accessing the government’s furlough Covid-19 work support scheme in April 2020, representing around 25% of all furloughed employees in the UK.
 
An ONS report highlighting the impact of Covid-19 on the UK hospitality industry released in July 2021 indicated a recovery trend for the sector. Nevertheless, significant challenges for restaurants, bars and coffee shops remain, with the government body estimating consumer spending on hospitality remains at less than 70% of than pre-pandemic levels, with industry turnover down by one quarter.
 
World Coffee Portal data shows Covid-19 disruption caused a near 40% sales decline among UK branded coffee chains in 2020, with the total number of outlets shrinking 1.9% and nearly £2bn ($2.8bn) wiped off the market value.
 
However, UK coffee shops, bars and restaurants have proved successful in introducing digital services, such as click & collect and delivery, in the face of government-mandated store closures and trading restrictions during the pandemic. ONS data shows the proportion of businesses temporarily closing fell from 81% during the UK’s first lockdown in spring 2020 to 52% in the early 2021 lockdown.
 
Moreover, the ONS has attributed takeaway services and outdoor dining to the UK hospitality industry achieving revenues of £3.3bn ($4.6bn) in May 2021 – five times higher than the same period in 2020.