Major pub and restaurant group sales up +0.8% in August

September 15, 2009

It remains “steady-as-she-goes” for Britain’s leading pub and restaurant groups, with latest sales figures for August just ahead of last year.

Like-for-like sales were 0.8% up on August 2008, according to the latest monthly figures from the Coffer Peach Business Tracker, confirming the steady course being steered by the bigger operators in the eating and drinking-out market during the downturn. The latest numbers come on the back of a +1.0% like-for-like gain in July, +0.4% in June and +0.6% in May.

The Coffer Peach Business Tracker is run by Peach Factory in partnership with KPMG, UBS bank and Coffer Group, and collects and collates sales data from 13 major companies in the sector to provide a aggregated market figure.

Said Peach Factory’s Peter Martin: “The big guns are also continuing to grow their collective market share at the expense of the competition. In the context of a generally accepted flat or slightly depressed pub and restaurant market, total sales for the companies that make up the Business Tracker sample were ahead 4.9% in August against the same month last year, following a 4.6% increase in July. The implication is that smaller and independent operators are the ones most feeling the spending pinch.”

August also saw a 3.7% increase in month-on-month sales against July.

The aggregated results are:
Like-for-like sales change (against same month last year): +0.8%
Total year-on-year sales change: +4.9%
Monthly sales change (against July, 2009): +3.7%

Richard Hathaway, head of Travel, Leisure and Tourism at KPMG, said: “The promotional strategies of the major restaurant operators continue to be effective in delivering growth. but when the recession finally ends, and this may unfortunately be a while off yet, the hard work of raising margins back up to pre credit crunch levels will have to begin in earnest.”

Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, added: “The stronger summer LFL sales are encouraging, but it will be interesting to see whether this is sustained into the winter period, since the impact of more families staying in the UK for the summer period could have a considerable impact on LFL sales. The expansion of the chain groups is despite balance sheet constraints and indicates that, as with pub closures, there are more severe problems in the independent sector.”

Looking at the broader market context, David Coffer, chairman of The Coffer Group, commented: “These results reflect the mentality we are experiencing at the transactional end of the market. There is a definitive increase in demand and an acceleration in transactions being completed, as well as a sea change in bank attitude to providing debt.

“As far as expansion is concerned, there is still an abundance of over-rented old stock overhanging the market place but most operators are peeking out of their ‘cave’ as the storm passes. Their heaviest reservations are still in connection with likely levels of unemployment, tax hikes and the attitude of a subdued and cautious general public in 2010.

“The industry considers it has learnt many lessons over the last 24 months. Specifically, that the public does require an ever more competitively priced, high quality product and are going to take some time to be weaned from the concessionary deals which have abounded in the last year and which have yet to be proven to be making substantial profits for those concerned.”

“Although there is much debate about the effect of promotions and discounting in the sector and the effect long-term on margins and profitability, the leading players are continuing to give people a reason to go out and are attracting customers through their door,” added Martin.

For further information please contact:

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

Helena Holm
The Coffer Group
0207 299 0709
hholm@coffergroup.co.uk