‘The industry is holding its breath’, finds Langton Capital report

6th February 2012, 12:40pm

A new report from Langton Capital has said that the cautious economic outlook is causing the UK’s hospitality industry to “hold its breath”.

The report, entitled 'The Consumer in 2012: Every Pound a Prisoner', provides a snapshot of 2011 and looks at the major factors which could drive the market in 2012.

It said that the promise and optimism shown at the beginning of 2011 was short-lived with consumer confidence hitting a seven-year low in October.

The report said: "A modest recovery in November and a late but reasonable Christmas did not rescue the year but did ensure that it ended on a less-than-awful note."

Langton's findings point to a tough 2012 as the "reality" of the recession sets in.

"Unemployment but more tellingly the fear of unemployment has impacted and will continue to impact consumer confidence and declining consumer confidence has negatively influenced spending and will continue to do so," said the report.

But it wasn't all bad news as the report suggests that the majority of consumers, those that keep their jobs and who are paying mortgage interest rates of little more than 0.5%, should see inflation abate and will have the capacity to spend should they choose to do so.

"They will remain nervous, will demand value and will need to be persuaded to part with their money because every pound's a prisoner and margin may have to be surrendered by many operators in the short term. Overall, however, good operators offering an excellent product from well-maintained units at attractive prices will prosper. Others may even protect or at least have a chance of rebuilding their margins but they will need to survive first in order to do so."

'The Consumer in 2012: Every Pound a Prisoner' is now out. You can purchase a copy for £200 plus VAT by emailing Mark Brumby: mark.brumby@langtoncapital.co.uk

The 44-page report includes a summary of 2011 and comments on the outlook for 2012 including reference to the economy, the propensity of consumers to spend (consumer confidence), their ability to spend (debts & unemployment), competition & the off-trade, government interaction, the calls for a move to 5% VAT and other factors.

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