NLW the sector's top concern, CGA Peach survey reveals

The National Living Wage will be the biggest challenge of 2016 for the eating and drinking out sector, CGA Peach’s latest Business Leaders’ Survey reveals.

The exclusive poll of more than 260 of the most senior and influential figures in the industry, sponsored by Korn Ferry, found that the National Living Wage was the most commonly cited concern for the year. That puts it even ahead of significant issues like mounting rental and property costs and market saturation. A third (33.7%) of leaders are ‘very concerned’ about the impact of the Wage, while only 6.8% are unconcerned.

The National Living Wage comes into force on 1 April, with those aged 24 or over entitled to at least £7.20 an hour. The change is likely to have a significant impact on operators’ bottom lines—though a handful including Fuller’s and Five Guys have moved to pre-empt the change by introducing the rate early.

The Survey found that larger operators tend to be most concerned about the impact of the National Living Wage. Four in five leaders of companies with more than 200 sites are either ‘very concerned’ or ‘concerned’ about it—compared with 63% of those with fewer than 50 sites.

Other research from CGA Peach confirms the pressure that restaurant and pub operators are now under on staff pay. Nearly four in five consumers (78%) responding to the CGA Peach BrandTrack survey said that paying staff the National Living Wage was ‘very important’ or important’ in their visiting decisions. More than half (55%) said they would be unwilling to eat in a restaurant if they knew staff were not being paid the Wage.

CGA Peach’s Business Leaders’ Survey also reveals alarm about the possibility of terrorist attacks in the UK following the atrocity in Paris. One in six (17%) leaders said they were ‘very concerned’ about the impact of terrorism, with rates highest among operators based within the M25.