Managed pub and restaurant groups saw sales slip in October,
with collective like-for-like sales down 1.0% on the same month last year, according
to latest monthly figures from the Coffer Peach Business Tracker.

London saw the biggest fall, with
like-for-likes 2.5% down on October 2015, with much of this being put down to
the boost eating and drinking-out, especially in the capital, received from last
year’s Rugby World Cup. Outside of the M25 like-for-likes fell just 0.5%.

“In October last year, like-for-likes
were up 2.5% across the country, and ahead a bumper 3.8% in London, largely on
the back of the popularity of the rugby tournament, with pubs doing especially
well. This last month we seem to have seen the downside of that,” said Peter
Martin, vice president of CGA Peach,
the business insight consultancy that produces the Tracker, in partnership with
Coffer Group and RSM.

“We have had three consecutive months
of positive sales growth in the sector following the EU-referendum, but these
October figures demonstrate that operators need to remain cautious with plenty
of volatility, uncertainty and competition out there in the market,” Martin
added.

Overall, casual dining chains saw a
0.7% like-for-like decline in October, with pub groups down 1.2%. London pubs
were down 3.3% on the same month last year.

Total sales for the month among the 34
companies in the Tracker cohort were up 1.9% on October 2015, reflecting the
fact that leading groups are continuing to open new sites.

The underlying annual sales trend shows
sector like-for-likes running at 0.6% up for the 12 months to the end of October,
little changed from the previous month

“Although the sector is
expecting some strengthening headwinds, at Davis Coffer Lyons we are finding
strong undiminished demand for restaurants and other licensed property in our
core markets. Demand for property in London and various provincial ‘hotspots’
remains unchanged, proving that the current successes and failings within the
leisure and hospitality sector do vary considerably around the country. As we
approach 2017, we may start to witness some areas with slower rental growth due
to the pressure of food costs, wages and rates, but premiums will certainly
hold for landmark or key leisure pitches with high footfall,” said Trevor Watson, executive
director, valuations, at Davis Coffer Lyons

“October
will be viewed as a disappointing month for many, but the longer term trend
over the last 12 months is of slightly positive LFL growth which is largely
reflective of the low-growth economic environment we are living in. However a perfect storm of
rising inflation, relatively full employment and a potential interest rate hike
on the horizon could result in an increasingly difficult trading environment
for operators. Christmas leisure and retail spend results this year will be
nervously anticipated as a bellwether of how confident consumers feel about their
prospects going into the New Year, “ added Paul Newman??, head of leisure and
hospitality
at RSM UK.

The Coffer Peach Tracker industry sales
monitor for the UK pub and restaurant sector collects and analyses monthly
performance data from 34 operating groups, and is recognised as the established
industry benchmark. CGA Peach is part of CGA Strategy.