December sales boost for leading pub and restaurant groups

January 18, 2010

Like-for-like sales across Britain’s leading pub and restaurant groups grew 2.9% in December, compared to the same month in 2008. Total sales were ahead 4.7%, marking a healthy performance by big name operators over the festive season – and demonstrating that consumers are still willing to go out to eat and drink.

The figures come from the monthly Coffer Peach Business Tracker, run by Peach Factory in partnership with KPMG, UBS and the Coffer Group, which monitors performance across the UK eating and drinking-out sector.

“The leading chains have worked hard to attract customers out of their homes, despite the weather, and that effort appears to have paid off,” said Peter Martin of Peach Factory. “This year, for example, more emphasis has been put on securing pre-booked business for bars and pubs, as well as restaurants, over the Christmas and New Year period.”

Tracker figures show that the country’s leading eating and drinking-out groups managed to keep their heads above water during 2009 in an increasingly competitive market. December marks the 9th consecutive month of positive like-for-likes collectively for the companies making up the Business Tracker group.

The trend is mirrored in Peach Factory’s annual Brands Survey, conducted in conjunction with Harris Interactive in August, which shows that consumers are increasingly turning to brands in the past year when choosing where to go out to eat and drink. “Not only has the public become more brand aware but are visiting them more often too,” added Peter Martin.

The festive activity saw month-on-month sales in December collectively up 22.9% against November.

The Tracker collects and collates sales data from 15 major companies to provide an aggregated market figure. Operators involved include leading managed pub chains Mitchells & Butlers, Whitbread and Punch Pub Co and leading casual dining restaurant groups Gondola, Pizza Hut and Tragus.

The aggregated results for December are:
Like-for-like sales change (against December 2008): +2.9%
Total year-on-year sales change: +4.7%
Monthly sales change (against November 2009): +22.9%

Mark Sheehan, Managing Director of Coffer Corporate Leisure, part of the Coffer Group, said: “Given that a number of pub and restaurant operators have already increased prices ahead of the January VAT increase to 17.5% the like for like increases are perhaps lower than might have been expected. They do not compare favourably with the recently released retail like for likes from the British Retail Consortium and KPMG of 4.3%, for example. The poor weather late in December may have been a contributing factor especially in major cities.”

Richard Hathaway, head of Travel, Leisure and Tourism at KPMG, commented: “The reduced number of Christmas parties and December’s poor weather didn’t dampen festive spirits as much as feared, with strong like-for-like sales up on last year, albeit against softer comparables.

“However, looking forward to next month’s figures, the extremely poor weather in recent weeks particularly the first half of January, traditionally a quiet month anyway, could see a more significant drop in sales for the sector.”

Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, added: “Like-for-like pub and restaurant sales growth increased from May to October. Poor weather at the end of November caused a set-back to just over 1% growth, but December finished the year strongly at +2.9%.

“We expect that most of the growth was due to changes in menu pricing. Several pub and restaurant chains incorporated price increases into their winter menus to give themselves some flexibility in how to deal with January’s VAT increase. The December result is particularly good given that most of the country experience cold and unsettled weather in the week before Christmas.

“The Tracker results for December bode well for January trading updates. So far we have only heard from Mitchells & Butlers who experienced 3.4% like-for-like sales growth from November 22 to January 2, but we expect most managed pub restaurants will have had meaningful growth in December.”

For further information please contact:

Peter Martin, Peach Factory
01704 550383
peter@peach-factory.com

Helena Holm, Coffer Group
020 7299 0709
hholm@coffergroup.co.uk