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Wed 15th Mar 2017 - Pub and restaurant like-for-like sales grow 1.7% in February, school half-term boosts casual dining
Pub and restaurant like-for-like sales grow 1.7% in February, school half-term boosts casual dining: Pub and restaurant groups saw collective like-for-like sales grow 1.7% in February compared with last year, according to the latest Coffer Peach Business Tracker. Overall, restaurant groups in the Tracker cohort had the best of February’s trading, with like-for-like sales up 2.4% nationally on the same month in 2016, boosted by family business during the school half-term holidays. Managed pubs were also ahead over the month but with collective like-for-likes up a more modest 1.2%. Regionally, London outperformed the rest of the country with like-for-like sales ahead 2.6% against 1.4% for outside the M25. The February results follow a 1.9% like-for-like increase in January and 2.2% growth over the busy Christmas and New Year period, and contrast favourably with faltering retail sales in the high street. “With mounting pressures on the sector from business rate hikes, the falling pound leading to higher food costs and the general uncertainty around Brexit, the fact consumers are still coming through their doors to eat and drink will be a welcome relief for operators,” said Peter Martin, vice-president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM. “Encouraging though these figures are, pub and restaurant groups will be working even harder this year to maintain trading levels as their margins are squeezed by increasing overheads. As our recent CGA Business Leaders Survey of 450 senior executives across pub, bar and restaurant chains showed, almost three quarters are looking to pass increased costs, at least in part, on to the consumer this year. That means they will have to redouble efforts to up the customer experience.” Total sales growth in February among the 34 companies in the Tracker cohort was up 4.7%, reflecting the impact of new openings over the year. However, the underlying annual sales trend shows sector like-for-likes running at just 1.0% ahead for the 12 months to the end of February. Mark Sheehan, managing director of Coffer Corporate Leisure, said: “London restaurants and bars are seeing strong sales growth, which they certainly need. With overheads increasing ahead of inflation the top-line growth is very important to food and drink operators. This year has started strongly for operators in the sector. However, the business rates revaluation has really focused operators on their occupancy costs and, despite the very minor concessions in the budget, this is yet another additional negative impact on margins and affecting future growth.” Paul Newman, head of leisure and hospitality at RSM, added: “Eight of the past nine months have shown like-for-like sales growth, providing operators with good cause for optimism. Despite a backdrop of uncertainty and cost pressures facing the sector, investor interest remains strong. We are seeing opportunities for both early stage and more mature leisure concepts that combine flair and innovation with a commercial focus on converting sales into profit.”


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