14 February 2011
UK Pub and Restaurant Chains Bounce Back in January
Leading pub and restaurant groups saw combined like-for-like sales climb +10.7% in January against the same time last year – bringing some relief to the sector after snow-hit December. Total sales, including the effect of new openings, were up 11.4%.
The figures come from the Coffer Peach Business Tracker – produced on a monthly basis by Peach Factory in partnership with KPMG, UBS and the Coffer Group. It monitors sales performance across 18 major pub and restaurant operators, including Mitchells & Butlers, Whitbread, Pizza Hut, Punch Pub Co, Gondola and Tragus.
December like-for-like sales had been down – 4.2% on 2009 because of adverse weather, and despite a late rally between Christmas and New Year.
”The positive news this past month will be tempered by the fact that January last year was itself badly affected by snow with like-for-like sales then down 5% on 2009,” said Peach Factory’s Peter Martin. “However, the double-digit recovery this year more than compensates for that and will encourage operators into hoping that this performance may be more than just a readjustment.”
During 2010, Business Tracker participating companies collectively recorded sales growth for the majority of the year, including six consecutive months of positive same-store sales up to and including November.
”January is traditionally a slow trading period, and month-on-month sales were down –28.5% on December,” added Martin. “ However, we are comparing the four trading weeks of January with the five of December, so it is actually not a bad result at all.”
Mark Sheehan, managing director of Coffer Corporate Leisure, part of the Coffer Group, said: “These strong January numbers are against weak comparables in January 2010. However, the sentiment among pub and restaurant operators is generally pretty robust after a better than expected start to the year for many. Many operators went into 2011 very cautiously and see some signs for optimism through the dark clouds.”
Richard Hathaway, head of Travel, Leisure and Tourism at KPMG added: “As January is traditionally a slow trading month for the sector and December was overshadowed by adverse weather, the +10.7% increase in like-for-like sales is a warm welcome for the pubs and restaurant sector. Total sales, including the effect of new openings, were up 11.4% indicating a steady recovery ahead of Valentine’s Day which is expected to boost sales for premium outlets and chains alike for February.”
Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, said that it appeared that the rise in VAT was a non-event for the eating-out sector. “We believe that most operators increased food prices with their autumn menus so only drinks prices would have appeared to customers to been affected by the VAT rise,” he added.
“Some of this month’s rise is a catch-up from a year ago and promotions would have been more effective this January when customers were snow-bound a year ago. On a two year basis, the compound annual growth in like-for-like sales has been 2.5% for January.”
“Most of like-for-like growth in the last two years has been about price/mix in our opinion, but volume is beginning to stabilise. If the contributors to the Coffer Peach Business Tracker experienced price rises in line with Restaurant RPI less changes in VAT, then volume excluding snowy months, fell 0.5% in 2010 compared to 2.4% in 2009,” he observed. “Many operators have talked about customers trading up the menu in 2010, or adding starters or desserts to their main meal, rather than increased footfall.”
Leinster concluded that given the trading updates from most of the listed companies in January, a strong like-for-like sales figure this month was not a surprise.
Coffer Peach Business Tracker is powered by Demographix