Restaurant and pub groups report October sales growth

November 12, 2014

• October like-for-like sales up 2.2% nationally
• While London sees 4.1% like-for-like increase

The London economy remains the main driver of growth in the eating and drinking out market. Nationally restaurant and pub groups saw collective like-for-like sales grow 2.2% in October against the same month last year, while inside the M25 that growth was 4.1%, according to latest Coffer Peach Business Tracker data.

“Managed pubs in London had a particularly good month, as they have had for most of the year,” said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group, Baker Tilly and UBS.

“Casual dining chains in the capital also traded strongly. But while the London market is getting better same-store growth, the chains, and in particular casual dining brands, are increasingly investing in opening new sites outside the M25,” said Martin.

“That expansion is reflected in the total sales growth across the 29 restaurant, bar and pub companies in the Tracker sample. Nationally, total sales were ahead 5.7% on last October, with restaurant group sales up 11% on a year ago outside of London, largely as a result of that extra site capacity,” he added.

“Overall, the groups are seeing steady, consistent growth in eating and drinking out, which now stretches back 19 months,” said Martin. “Looking at the underlying trend, the year-on-year like-for-like rate is running at 2.9% up on 2013, with London up 3.7%.”

Pubs and bars outside of London remain the weakest part of the market, the data show, with like-for-like sales essentially flat in October, much the same as they were in September.

Trevor Watson, director at Davis Coffer Lyons, said: “The October figures highlight that, in the corporate casual dining market, the rate of new store opening is significantly greater away from London, largely because of greater availability of sites and the improved returns available in these areas. The London market is vibrant with rents at record levels, with overseas and independent operators dominating. This is typical for this phase of the cycle. Trading performance continues to be strong both in the capital and across the country as economic recovery strengthens and the prospects of an imminent interest rate rise recede.”

Paul Newman, head of leisure and hospitality at Baker Tilly, added: “Having 19 consecutive months of like for like growth for the UK eating and drinking out market is a fantastic achievement. However, as always the devil is in the detail. As we turn towards the longer, colder evenings, it is the managed pub chains that still appear to be leading the way and we expect to see this run of form continue into the winter months. Innovative fit outs incorporating comfortable surroundings with a wide selection of craft beers together with a quality food offering is driving this resurgence, particularly within London and larger cities around the UK.”

Jarrod Castle, leisure analyst at UBS Investment Research, said: “LFL sales growth for October was the same as September at 2.2%, compared to 1.3% for August, 2.2% in July and 0.4% in June. This is a consistent story and leaves the 12-month moving average growth rate at 2.9%, up from 2.4% September. Once again strongest LFL growth was within the M25 and more importantly it is accelerating.”

The Coffer Peach Tracker* industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 28 operating groups, and is recognised as the established industry benchmark.

Coffer Peach Business Tracker is powered by Demographix

About Coffer Peach Business Tracker
CGA Peach collects sales figures directly 29 leading companies. Participants include Mitchells & Butlers* (owner of Harvester, Toby, Browns, All Bar One etc), Pizza Hut, Whitbread (Beefeater, Brewers Fayre, Table Table), Pizza Express, Spirit Group (Flaming Grill, Fayre & Square), TGI Fridays, Tragus (Café Rouge, Bella Italia), Stonegate (Slug & Lettuce, Yates’), Marston’s, Gondola (Zizzi, ASK), Wagamama, YO! Sushi, Novus (Tiger Tiger), Fuller’s, Carluccio’s, Young’s, Living Ventures, Strada, Amber Taverns, Hall & Woodhouse, Gaucho, Las Iguanas, Intertain (Walkabout), Tattershall Castle Group, La Tasca, Giraffe, Loungers, Byron and Le Bistrot Pierre.
*includes Orchid Pub Co acquisition