Pub and restaurant groups trade strongly in lead-up to Christmas

December 18, 2013

• National like-for-like sales up 1.7% in November
• Managed pub groups see collective 2.4% growth

Britain’s pub, bar and restaurant groups saw stronger growth in November than in the previous two months. Showing no signs of a trading lull in the build-up to Christmas, collective like-for-like sales grew 1.7% in November compared with the same month last year, according to latest figures from the Coffer Peach Business Tracker.

Total sales in November, including the impact of new site openings, were up 4.8% across the 27 companies contributing to the Tracker. Managed pub groups performed ahead of the market with a 2.4% like-for-like sales increase.

“It was a better performance than in either October or September, when like-for-likes grew 1% and 0.4% respectively, with the market now showing sustained if slow growth,” said Peter Martin of CGA Peach, the business insight consultancy that produces the Tracker, the sector’s most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS.

“Regionally, operators outside of London had a better month too, trading only just behind London, with like-for-likes up 1.6%, compared to 1.8% for the capital,” added Martin. “These are encouraging figures, especially as November 2012 had been a particularly strong month boosted by some school half term holidays falling in the month.”

Overall, managed pub operators performed best with collective like-for-likes up 2.4%, with drink-led pubs in London producing the strongest results. “Drink-led managed pubs seem to be recovering, including outside of London. Part of that is down to more investment and better offerings, but also to groups disposing of poorer performers leaving a stronger core business,” added Martin.

Restaurant groups had a tougher time, with like-for-likes flat last month. “While branded chains, busy opening new sites, are the main drivers of total sales growth, that doesn’t seem to be being converted into same-store growth,” he said.

The longer-term trend for the managed pub and restaurant sector remains positive, with year-on-year like-for-like sales for the 12 months up to the end of November running at 1.4% up on the previous 12 months, with total sales growth running at 4.1% ahead. “This is almost identical to the position this time last year, showing the market remains remarkably stable,” observed Martin.

Trevor Watson, director at Davis Coffer Lyons, said: “The sustained, gentle recovery is clearly established. The political cycle and the need for the Government to deliver a recovery leading up to the next election suggests that, barring a major global event, 2014 should see a steady improvement in consumer confidence. This will be led, at least in part, by the ongoing housing market recovery or boom (depending where in the country you are).”

Paul Newman, head of leisure and hospitality at Baker Tilly, added: “A 1.7% increase in like for like sales against very strong comparatives from November 2012, which were themselves up 3.4% on the same month in 2011, can only help to reinforce the investment credentials of the pub and restaurant industry. It also represents the eighth consecutive month of growth.

“Private capital continues to flow into a sector with a proven ability to generate strong returns on investment and an influx of private equity and EIS funding raised in 2013 has likely helped drive new site openings across the UK to over 90 in November alone, a record for the year. An increasingly discerning, experimental UK consumer that rewards innovation should ensure that this trend continues into 2014.”

Jarrod Castle, leisure analyst at UBS Investment Research, observed: “November numbers are stronger than the year to date averages of 0.7% for LFL growth and 3.5% for total growth, despite tough comps of +3.4% in November 2012. Regional LFL growth was also strong last month at 1.6%, compared to a year-to-date average of 0.2%. London saw LFL growth of 1.8%, broadly inline with the year-to-date average.”

The Coffer Peach Tracker* industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 27 operating groups, and is recognised as the established industry benchmark.

A full analysis and breakdown of the monthly results is available only to participants and subscribers to the Tracker service.

Coffer Peach Business Tracker is powered by Demographix

About Coffer Peach Business Tracker Peach Factory collects sales figures directly 27 leading companies. Participants include Mitchells & Butlers (owner of Harvester, Toby, Browns, All Bar One etc), Pizza Hut, Whitbread (Beefeater, Brewers Fayre, Table Table), Gondola (PizzaExpress, Zizzi, ASK, Byron), Spirit Group (Chef & Brewer, Fayre & Square), TGI Fridays, Tragus (Café Rouge, Bella Italia, Strada), Stonegate (Slug & Lettuce, Yates’), Marston’s, Orchid Pub Co, Wagamama, YO! Sushi, Novus (Tiger Tiger), Fuller’s, Carluccio’s, Young’s, Living Ventures, Amber Taverns, Hall & Woodhouse, Gaucho, Las Iguanas, Intertain, Tattershall Castle Group, La Tasca, Giraffe, Loungers and Le Bistrot Pierre.