18 June 2018
May sun shines on pubs, but casts shadow on restaurants
Total Like For Like Sales Growth
Hot weather in May helped boost trade in Britain’s pubs, but hit restaurant sales. Overall, the country’s managed pub, bar and restaurant groups saw collective like-for-like sales up 1.4% on May last year, according to latest figures from the Coffer Peach Business Tracker.
While managed pubs saw collective like-for-likes jump 3.5% for the month, with drink-led outlets doing best, casual dining brands saw like-for-like sales drop 2.1% against the same period last year.
“It’s a familiar story. When the sun shines people head for the pub, or more precisely the pub garden. In contrast, restaurants do better when it’s dull and damp. Weather remains the biggest factor when it comes to sales in the out-of-home market. It’s the way it is,” said Peter Martin, vice president of CGA, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.
Regionally London did marginally better than the rest of the country with like-for-like sales up 1.6% against 1.4% for outside the M25, with the difference between pubs and restaurants mirroring the national picture.
“The effect of the Royal Wedding on trade is hard to judge, but if anything, it may have depressed sales with many people staying home to watch on the TV,” said Martin.
“The good news is that overall the sector saw an uplift in trading in May, which contrasts with the 1.2% fall in April. The public continues to go out to eat and drink, and confidence among operators is also returning, if not yet to pre-Brexit levels,” he added.
Mark Sheehan, Managing Director of Coffer Corporate Leisure added, “It’s always easy to blame the weather. But it was a long wait until May when the pub sector got the benefits of some sunshine. Better weather and a World Cup with a record 32 teams should see very strong trading for many pub businesses over the coming period. Restaurants and food led pubs may have a tougher summer to add to the pressures they are under. In the longer term, we see competition for casual dining chains become little less intense as poorer performing units are closed.”
“With the World Cup underway and forecasters predicting more scorching weather to come, the pub sector looks set to enjoy a bumper summer – assuming England make it past the group stages,” said Paul Newman, Head of Leisure and Hospitality at RSM. “In contrast, it has been a tumultuous 2018 for the eating out market. That said, the recent acquisition of Pret A Manger and Rosa’s underline the enduring attractiveness of growth opportunities for overseas investors in the sector. We expect further deals to follow as well-capitalised businesses look to take advantage of better sites at lower rents.”
Martin added: “The latest CGA Fourth Business Confidence Survey in May showed that 75% of company leaders are now optimistic about the prospects for their own businesses, with 47% upbeat about the market as a whole — both 11 percentage points higher than at the time of the last confidence survey in February.
“The shake-out of sites in the casual dining sector seems to be helping by reducing the threat of oversupply, and deals are also being done in the market, showing that investors also want to be involved in pubs, bars and restaurants,” Martin said.
Underlying like-for-like growth for the 39 companies in the Tracker cohort, which represents both large and small groups, is still subdued, running at just 0.6% for the 12 months to the end of May, but up from 0.4% at the end of April.
Total sales growth across the cohort, which includes the effect of new openings, was 4.5% in May, reflecting continuing if slower brand roll-outs, and running at 3.8% for the 12 months to the end of the month.
The Coffer Peach Tracker industry sales monitor for the UK pub, bar and restaurant sector collects and analyses performance data from 39 operating groups, with a combined turnover of over £9bn, and is the established industry benchmark.
About Coffer Peach Business Tracker
CGA collects sales figures directly 42 leading companies. Participants include Mitchells & Butlers (owner of Harvester, Toby, Miller & Carter, All Bar One etc), Pizza Hut, Whitbread (Beefeater, Brewers Fayre, Table Table), Pizza Express, The Restaurant Group (Frankie & Bennys, Chiquitos, Brunning & Price), Spirit Group (Chef & Brewer, Flaming Grill, Fayre & Square), Casual Dining Group (Café Rouge, Bella Italia, Las Iguanas), Stonegate (Slug & Lettuce, Yates’, Walkabout), Deltic, TGI Fridays, Marston’s, Azzurri Restaurants (Zizzi, ASK), Wagamama, YO! Sushi, Prezzo, Novus (Tiger Tiger), Fuller’s, Carluccio’s, Young’s, Living Ventures, The Alchemist, Strada, Amber Taverns, Hall & Woodhouse, Gaucho, Giraffe, Loungers, Byron, New World Trading Co, Peach Pub Co, Le Bistrot Pierre, Laine Pub Co, All Star Lanes, Le Pain Quotidien, Fazenda, Liberation Group, Wadworth, Honest Burgers, The Snug Bar, Downing LLP (investment partner of Antic London), Bermondsey Pub Company and Revolution Bars Group.
Coffer Peach Business Tracker is powered by Demographix