• Overall like-for-likes sales up 0.3% on July 2015
• London outperforms rest of Britain
Britain’s managed pub and restaurant groups saw collective like-for-like sales grow 0.3% in July against the same month last year – the first indication that the country is not giving up on going out to eat and drink in the wake of the Brexit vote.
Latest figures from the Coffer Peach Business Tracker show, however, that performance was not uniform across the market, with London operators seeing a healthy 2.9% like-for-like sales uplift against July 2015, while those outside the M25 saw like-for-likes fall 0.5%.
“Pub groups also did better than restaurant chains, but that was probably more to do with the good weather than anything else,” said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.
“The market will be relieved however that trade has more than held up post-referendum, as confidence among the bosses of pub and restaurant chains took a tumble after the vote, as our own exclusive CGA Peach research showed,” added Martin.
“Interestingly, operators in London emerged as slightly more upbeat about business prospects in the wake of the vote than their colleagues outside the M25, in part down to an anticipation of increased UK tourism - and that seems to have been reflected in sales on the ground. The London market is looking more robust,” he said.
Managed pub groups collectively saw like-for-likes up 0.9% over the month, compared to a 0.6% like-for-like decline among casual dining chains against July last year. But Martin put this down to the good weather during the month, particularly during the mini-heatwave of the third week.
“Sunny weather always favours pubs over restaurants, and that is particularly true during holiday periods,” he added.
Total sales for the month among the 33 companies in the Tracker cohort were up 4.0% on July 2015, reflecting the new site openings over the past 12 months, especially outside of London.
The underlying annual sales trend shows sector like-for-likes running at just 0.8% up for the 12 months to the end of July, with restaurant chains up 1.0%, pub groups ahead 0.7%.
“It’s been a fairly sluggish market so far this year and the Brexit vote doesn’t appear to have altered that trend one way or another – and July’s performance was actually stronger than April or May’s. The eating and drinking out sector remained fairly resilient during the uncertainty of the recession and it may not be too optimistic to expect that people will continue to go out to eat and drink during the current uncertain times,” said Martin. “Where they choose to go is another matter and in an underlying flat market that means competition will remain fierce.”
Mark Sheehan, managing director at Coffer Corporate Leisure, said: “These numbers show some resilience post-referendum. While we expect to see costs continue to increase and margins erode over the coming months, putting pressure on profitability for the hospitality sector, a weaker pound should be particularly helpful for attracting tourists to London and other mainstream tourist centres. The pub sector continues to outperform restaurants, where we do expect to see further pressure on sales outside London.
“From a transactional perspective, following the referendum we experienced an initial hesitancy from the market to make big property commitments, but now that the initial shock has passed we continue to see similar activity as we did prior to the vote. A weaker pound is again attracting certain overseas buyers to target the UK where they see value.”
Paul Newman, head of leisure and hospitality at RSM, added: “While warnings of the UK entering into a recessionary period persist, these results suggest this is not something that operators in the eating and drinking out sector are yet experiencing en masse. Indeed, post Brexit many of our clients are now moving ahead to more effectively plan and refine business models with increased certainty.
“The overall environment for deals remains strong. In fact, we completed more corporate finance transactions in July than in any other month so far this year with banks and private equity both continuing to deploy capital. The UK is a genuine world leader in leisure and hospitality and operators have consistently proved themselves to be adaptable, agile and resilient in the face of change. One of the biggest benefits to come out of the EU referendum result was certainty – certainty that at least we now know the direction of travel.”
The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 33 operating groups, and is recognised as the established industry benchmark. CGA Peach is part of CGA Strategy.
About Coffer Peach Business Tracker
CGA Peach collects sales figures directly 33 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 (Flaming Grill, Fayre & Square), Casual Dining Group (Café Rouge, Bella Italia, La Tasca, Las Iguanas), Stonegate (Slug & Lettuce, Yates’), TGI Fridays, Marston’s, Azzurri Restaurants (Zizzi, ASK), Wagamama, YO! Sushi, Prezzo, Novus (Tiger Tiger), Fuller’s, Carluccio’s, Young’s, Living Ventures, Strada, Amber Taverns, Hall & Woodhouse, Gaucho, Intertain (Walkabout), Giraffe, Loungers, Byron, New World Trading Co, Peach Pub Co, Le Bistrot Pierre, Laine Pub Co, All Star Lanes and Downing LLP (investment partner of Antic London)
Coffer Peach Business Tracker is powered by Demographix
For more comment contact:
Peter Martin, CGA Peach
07825 350249 (mobile)
Claudia Cronshaw, Coffer Group
020 7299 0709 (office)
Paul Newman, Head of Leisure and Hospitality, RSM
020 3201 8637