As we know business conditions proved more challenging than we expected-or hoped for-during the first half of this year. However, there are now some encouraging signs. Most recently July produced the strongest hospitality sales growth we have seen for some time. That growth was geographically widespread, although, as we’ve come to expect, some regions continue to fare a lot better than others.

We have become pretty adept at searching out the good news stories and any improvement is welcome. But the conversations we are currently having with members do not yet suggest that things feel much better. Yet. Many members are still telling us their revenue is below where it was a year ago. Profitability can be fleeting at the best of times in hospitality and it remains the greatest concern right now.

There are understandable reasons for that disconnect. Menu prices were 3.1 per cent higher in June than a year earlier, so some sales growth reflects the increases businesses have needed to make as costs have risen across their operations.

Even then, businesses remain reluctant to pass every increase on to customers while discretionary spending is subdued. Food, wages, rent, insurance, council charges and compliance costs are continuing to erode margins, including for businesses whose sales are slightly ahead of last year.

So perhaps the more useful question now is what businesses can do to put themselves in the best position if the improvement continues.

• Look beneath the turnover figure. You need to be clear, is growth coming from more customers, a higher average spend, or menu price increases? More importantly, is any of that additional revenue reaching the bottom line?
• Review your menu performance. If a popular item is no longer making a reasonable contribution, leaving it unchanged will not help your business recover. The answer might be a price adjustment, but it could also be a change to the ingredients, portion, supplier or the dish’s place on the menu.
• Revisit operating costs. After several years spent responding to one pressure after another, there may be expenses you simply haven’t had time to review. Small savings across energy use, food waste and purchasing can still make a meaningful difference when margins are tight.
• Start planning for summer staffing. If demand continues to strengthen, consider what your summer staffing capacity needs to be. Allow time to recruit before the pressure arrives.
• Create some breathing space to look ahead. This may be the hardest one. Owners have spent a long time protecting their businesses from the next challenge. However, preparing for better conditions also means considering where opportunities may be emerging and which ideas have been put on hold.

This is not about assuming the difficult period is behind us. We know one strong month of sales does not make a trend. But there is a difference between being appropriately cautious and remaining permanently in survival mode. More than a third of our members expect conditions to improve over the coming year. We are not there yet, but if the recent signs continue, businesses that start looking ahead now will be in a better position to turn improving demand into real progress.