Sales growth across the managed pub, bar and restaurant
sector slowed in August, with collective like-for-like sales up just 0.2%
against the same month last year, latest figures from the Coffer Peach Business
Tracker show.

The flat trading highlighted by the
Tracker is down on the 0.6% increases in same-store numbers recorded in both
June and July.

“The wet weather can take some of the
blame, with restaurant chains, which tend to do better when it’s raining,
seeing a collective 1.1% increase for the month against a 0.3% decline among
pub and bar groups,” said Peter Martin, vice president of CGA, the business insight consultancy that produces the Tracker, in
partnership with Coffer Group and RSM.

Regionally, London had a particularly
poor month, with like-for-likes across the capital down 1.6%, while the rest of
the country saw a 0.8% increase on August 2016.

“What will worry operators is that this
performance is lagging inflation, now edging up towards 3%, by some distance.
The underlying like-for-like trend for the 12 months up to the end of August is
better, up 1.3% of the previous 12 month period, but that too is behind the
inflationary curve,” added Martin.

“The sector has had to absorb
significant cost pressures already this year, particularly around property
costs and food inflation – and most operators have passed at least some of that
on to consumers through price rises. While those menu increases don’t appear to
have not hit sales, neither have they provided any noticeable revenue boost,”
he said.

“The one positive point is that
consumers are still going out to eat and drink, and although sales are sluggish
and hard fought for at least they are not suffering the way other parts of the
economy are, such as car sales,” Martin added.

Total sales growth in August among the
37 companies in the Tracker cohort was 3.5%, reflecting the continuing if more
subdued effect of new openings over the year, but down on the 3.7% seen in
July.

“These numbers reflect the tough summer
that many pubs and restaurant businesses have suffered. There is no hiding.
These like-for-like figures are well below inflation. For restaurants
particularly they reflect the new openings over an extended period that have
taken some trade from established operators. Pubs suffered from poorer
weather in August compared to last year,” said Mark Sheehan, Managing Director at Coffer
Corporate Leisure.

Paul Newman, head of leisure and hospitality at RSM,
added: “Promotional activity has increased significantly in 2017 and yet
sales continue to stagnate, putting further pressure on margins. Despite this,
the appetite of new entrants joining the market remains remarkedly resilient
with London set for a record 44 restaurant launches this month as reported by
Hot Dinners. As consumer spending tightens and cost pressures increase,
competition from new independents will simply add to the challenges being faced
by existing operators.”

The Coffer Peach Tracker industry sales monitor for
the UK pub and restaurant sector collects and analyses monthly performance data
from 37 operating groups, and is recognised as the established industry
benchmark.