16 October 2014

September weather boosts eating and drinking-out growth

• Monthly like-for-like sales up 2.2% on last September
• 18th consecutive month of like-for-like growth for sector

Restaurant and pub groups enjoyed the benefits of September’s Indian Summer sun, with a collective like-for-like sales up 2.2% on the same month last year, according to latest Coffer Peach Business Tracker data. It was the sector’s 18th consecutive month of positive growth.

“Pubs in London and restaurants outside of the M25 were the strongest performers – with like-for-likes up 4.0% and 4.8% respectively. September’s warmer weather was a welcome bonus after a colder than average August had seen like-for-likes up a more modest 1.3% across the market,” 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.

Total sales, which reflect the effects of new site openings, were up 5.2% on September 2014.

“Although the better than expected late summer weather helped the market, we are also seeing steady, consistent growth in eating and drinking out, which now stretches back 18 months,” said Martin. “Looking at the underlying trend, the 28 companies in the tracker sample together recorded year-on-year sales for the 12 months to the end of September 2.7% up on 2013.

“Eating-out frequency also remains healthy, with the Peach BrandTrack consumer survey showing that 42% of the GB adult population eating out at least weekly, rising to 58% of 25-34 year-olds,” he added.

Drink-led bars and pubs outside of London remain the weakest part of the market, the data shows, with like-for-like sales essentially flat in September.

“Branded casual dining chains, however, are a major driver of growth outside of London,” observed Martin. “Total sales for the restaurant groups in the sample grew 11.6% outside the M25, buoyed by continuing brand roll-outs. Like-for-like performance is also improving as chains revamp existing sites and are more willing to shed poorer sites.”

Mark Sheehan, managing director of Coffer Corporate Leisure, observed: “These figures are a further demonstration of strength in the eating and drinking out sector and reflect both the improving economy and the gradual habitual change to drink and dine out more often. While the unseasonal warm weather was great for pubs it can present a challenge for restaurants especially those located in shopping centres. Landlords are now increasingly working to change this and we are seeing structural changes in the retail sector as they work to make shopping centres leisure destinations in their own right.”

Paul Newman, head of leisure and hospitality at Baker Tilly, added: “Already 2014 has seen increasing levels of corporate activity in the leisure and hospitality sector amid improving trading, rising consumer confidence and strong long-term projections for the eating and drinking-out market. The continuation of such positive like for like sales growth will do nothing to quell the current private equity feeding frenzy in the restaurant and bar sector and provides further impetus for those brands which are expected to consider exit options over the coming months.”

Jarrod Castle, leisure analyst at UBS Investment Research, said: “Like for like sales growth for September was 2.2% compared to 1.3% for August, 2.2% in July and 0.4% in June, showing real improvement month on month. This leaves the 12-month moving average growth rate at 2.4% ( against 2.2% in August) for like-for-like sales.”

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 28 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, Strada), Stonegate (Slug & Lettuce, Yates’), Marston’s, Gondola (Zizzi, ASK), 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, Byron and Le Bistrot Pierre.
*includes Orchid Pub Co acquisition