17 July 2013

Pub and Restaurant Groups See Positive Sales Growth in June

• Like-for-like sales up 1.9% on June 2012
• London market the star performer
Britain’s restaurant and pub groups saw collective like-for-like sales increase 1.9% in June, against the same month last year. Total sales, including the impact of new openings, were ahead 4.8%, according to latest figures from the Coffer Peach Business Tracker.

“The figures follow a 1.2% like-for-like increase in May, and suggest a real if modest recovery for the eating and drinking out market after a terrible weather-affected winter and spring,” said Peter Martin of Peach Factory, the business intelligence specialist that produces the Tracker, the sector’s most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS.

“However, the London market proved to be the star-performer with collective like-for-likes up 5.1% in the month, while the rest of the country had an essentially flat June, with LFLs edging up just 0.5% on last year,” added Martin.

Last June’s figures were distorted by the Queen’s Jubilee holiday, as well as football on TV, which was generally good for pubs but hit casual dining business, especially in London. On the weather front, June 2013 was close to the long-term average for the time of year.

“London saw strong trading from both chain restaurants and managed pubs. Outside of the capital, however, pub sales were flat, with drink-led pubs seeing a like-for-like sales decline. Food remains the growth driven in the managed pub sector,” added Martin.

“People are continuing to go out to eat and drink, but there is no single narrative for the market. Behind the headline figures, which show that year-on-year like-for-like sales across the Tracker cohort were running at 1% up at the end of June on the previous 12 months with total sales ahead 4%, there are real and important differences regionally and between types of operation. It points to a still highly-competitive market, with operators needing to keep close track of changing customer habits,” he concluded.

Mark Sheehan, managing director of Coffer Corporate Leisure, said: “Drawing direct comparisons with June 2012 is extremely difficult because the Diamond Jubilee and the rain made for a unique month. That said, these like-for-likes are overall relatively disappointing – especially in the provinces where there has generally been improved confidence, which we would have expected to see in the figures. We should see these numbers improve over the coming months.”

Paul Newman, head of leisure and hospitality at Baker Tilly, added: “The British consumer’s love affair with eating and drinking out continues to bloom, with the warm weather proving a very effective aphrodisiac. Coupled with improved consumer confidence and the BCC’s surprise upgrading of UK GDP growth forecasts, the outlook for continued growth in the eating and drinking out sector is certainly encouraging.

“The last month has seen significant capital being invested in new site openings, with the high profile Shake Shack and Five Guys in London both generating 30 minute plus lunch time queues and on-going estate investment, with Intertain reportedly generating 80% ROI on its revitalised Walkabout sites. The fight for market share is hotting up and operators need to ensure they have the financial flexibility to continue responding to the discerning UK consumer’s changing needs.”

Jarrod Castle, leisure analyst at UBS European Leisure Research, added:  “It’s difficult to draw conclusions from this month’s data. While May gave us the opportunity to assess the industry with relatively clean comps, June 2012 saw both an extra Bank Holiday for the Queen’s Jubilee and relatively poor weather throughout most of the month. Additionally, Euro 2012 should have had a mixed effect on the data. Next month, we expect the rebound to continue, due to the excellent weather we have seen in recent weeks and easy comps. However, in August, the Olympics will provide yet another distortion to the data.”

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.