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Morning Briefing for pub, restaurant and food wervice operators

Wed 10th May 2017 - Sector like-for-likes bounce back with 4.4% growth in April, pubs outperform restaurants
Sector like-for-likes bounce back with 4.4% growth in April, pubs outperform restaurants: Managed pub and restaurant groups were back in growth in April, with collective like-for-like sales up 4.4% compared with the same month last year, according to the latest Coffer Peach Tracker. “This month’s numbers compare with a 0.5% dip in like-for-likes in March, and the gap between the two can be largely put down to the Easter holidays falling in March last year but in April this,” said Peter Martin, vice-president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM. “Although trading over the Easter weekend was not as good this year compared with the four-day holiday in 2016, down 3.8% on a like-for-like basis, the boost the break provides to the sector can still be seen in April’s trading growth. Taken together the two months’ numbers show there is still underlying growth in the sector, and especially among pub groups.” Managed pub operators saw a 6.1% jump in collective like-for-like sales in April, compared with a much more modest 1.5% increase for restaurant chains in the Tracker cohort. “This can be put down in part to the drier weather this year, with branded restaurants in London having a particularly tough April, but we have also seen restaurant performance generally slipping behind the pub sector in recent months,” said Martin. On a regional basis, London was up 2.8% in April, compared with a 4.9% like-for-like increase for outside the M25, reversing the pattern seen in March. “The fluctuations between London and the rest of the country shows there is still volatility in the market – and despite the bounce in April, operators will remain cautious about prospects for the rest of the year, and underlying growth is still fragile,” added Martin. Total sales growth in April among the 33 companies in the Tracker cohort was up 7.4%, reflecting the continuing impact of new openings during the year. The underlying annual sales trend shows sector like-for-likes running at 1.1% ahead for the 12 months to the end of March. Trevor Watson, executive director of Davis Coffer Lyons, said: “The impact of the Easter weekend is clearly dominant in this month’s figures. There is an increasing awareness that the rate of new restaurant openings has exceeded wet-led venues in recent years and the industry, and the statistics for the industry as a whole, reflect this. I think we can expect to see managed wet-led venues outperform restaurants in terms of sales growth for the next few months, while consumer confidence is expected to weaken.” Paul Newman, head of leisure and hospitality at RSM, added: “This month’s figures show that the habitual and prioritised nature of spending on eating and drinking out continues to prevail. Operators need to remain innovative and flexible to cater for changing demand patterns as economic uncertainty takes its toll on discretionary spending. Those who indulge the consumers’ ongoing preference to eat what they want, when they want, whether it’s a power breakfast, ‘unicorn’ cake or coal-cooked meat, will thrive and prosper.”


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