Brexit anxiety is hitting the confidence of pub and bar operators, according to a new survey by CGA and Fourth.
The majority of the 130 industry leaders asked favour a 'soft Brexit' outcome with more than two thirds supporting a second referendum.
More than a third of operators – 36 per cent – are still optimistic about prospects for the next year though. But this is a drop of 11 per cent since last time they were polled in May 2018.
Two thirds also remain optimistic about their own business performance but again this has fallen from 75 per cent last quarter.
In all, 71 per cent said the decision to leave the EU had already had a negative effect on business.
Most cited an increase in the cost of ingredients and the decreased availability of staff as the key factor already impacting businesses. 92 per cent said the reduced access to kitchen staff either will or already has had negatively effected them.
"The restricted availability of staff is immediate and critical," said one respondent to the survey.
Leaders indicate that challenges are particularly acute in London, where businesses are most heavily dependent on EU nationals for staffing.
The survey from CGA and Fourth also revealed how operators were dealing with Brexit:
• Three quarters have anticipated its impacts by investing in staff training and retention.
• A quarter (27 per cent ) have invested in local food and drink suppliers.
• But a third of leaders (31 per cent) still consider their business to be under-prepared for Brexit.
Phil Tate, chief executive of CGA, said: "It reveals the huge disruption that the EU Referendum has already caused to the costs and confidence of businesses, and the further impacts it is likely to have on staff recruitment and retention, especially in London.
"Our research suggests that the large majority of operators are now pinning their hopes on a 'soft' Brexit, or even a second referendum."
Ben Hood, chief executive of Fourth, said: "With rising costs – including those associated with employment – a shrinking talent pool and the sector's heavy reliance on EU workers, the government needs to navigate the complex process of leaving the EU with an approach that supports hospitality employers."