The Restaurant Association provides a quarterly pulsecheck on the industry, bringing together industry statistics, member insights and feedback.

The Q2 2026 figures for hospitality tell a fairly mixed story. There are some encouraging signs. Business confidence appears to be stabilising, more operators say they are fully staffed and sales are still slightly ahead of last year. But when we look beyond the headline numbers, it is clear that many hospitality businesses are not yet feeling a meaningful improvement.

Hospitality sales in June were 1.2 per cent higher than in June 2025. However, prices for restaurant meals and ready-to-eat food increased by 3.1 per cent over the same period. In real terms, that suggests customers are buying less hospitality than they were a year ago.

This is reflected in what members are telling us. In our Q2 Business Survey, 43 per cent of respondents said their revenue was lower than in the same quarter last year, while around two-thirds said their business was less profitable.

For many businesses, costs are simply continuing to rise faster than revenue. Food costs remain the biggest concern, followed by reduced customer spending, wage costs and the rising price of consumables. Members are also increasingly raising the impact of council charges, licensing fees and regulatory levies.

At the same time, businesses remain very aware of the pressure on their customers. There is only so much operators feel they can add to menu prices before it begins to affect demand. That leaves many absorbing at least some of the increase themselves, putting further pressure on already tight margins.

The staffing picture is changing

Staff shortages are not as widespread as they were, with 75 per cent of respondents saying they are now fully staffed. This is a positive shift, although it also reflects the fact that fewer businesses are recruiting while trading remains subdued.

Where businesses are hiring, experienced people are still difficult to find. Almost three-quarters of those recruiting for mid-to-senior roles said it was difficult or extremely difficult to find a suitable candidate. For junior positions, that figure was much lower at 32 per cent.

The challenge is increasingly less about finding people to fill every role and more about finding experienced chefs, managers and future leaders.

Members continue to tell us they want to see stronger connections between schools and hospitality, as well as training that combines practical experience with formal learning. Immigration also remains important, particularly for roles where the skills and experience needed are not readily available locally.

Confidence is holding, but recovery remains uneven

Thirty-nine per cent of respondents expect business conditions to improve over the next 12 months, while 37 per cent expect them to remain about the same.

That gives us some reason for cautious optimism, but we also know that conditions vary considerably between regions and businesses. Some are beginning to see a lift, while others remain under sustained pressure.

That pressure is taking a personal toll. Forty per cent of owners told us their health and wellbeing was worse than usual. After several years of disruption and uncertainty, that is something we cannot overlook.

During Q2, the Association continued to provide practical support to help businesses manage these conditions. Our Helpline responded to 753 member enquiries, and we delivered 12 professional development sessions. We also launched ResilienceOS, a new mental health and wellbeing resource for hospitality leaders and teams, and made Licence Controller Qualification training available online.

Work is also progressing on the national rollout of Kai Keepers, following a pilot in which participating businesses reduced food waste per cover by 16.4 per cent. Reducing avoidable waste is one practical way businesses can lower costs while also improving their environmental performance.

Alongside this support, we have continued taking members’ experiences into our work with government. During the quarter, this included engagement on the Hospitality Sector Review, the Tourism Policy Statement, employment leave reform, food safety qualifications and other regulatory issues affecting the industry.

The Q2 Dashboard does not point to one simple conclusion. There has been progress in some areas, particularly staffing and business confidence, but the gap between revenue and costs remains a significant concern.

For a genuine recovery to take hold, we need to see more than sales growth. We need that growth to reach businesses’ bottom lines and give operators the confidence to invest, employ and plan for the future.

Read the full Q2 2026 Quarterly Hospitality Dashboard.