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Morning Briefing for pub, restaurant and food wervice operators

Fri 11th Sep 2020 - Sector like-for-likes bounce back to 2019 levels thanks to EOTHO but market ‘more unstable than ever’
Sector like-for-likes bounce back to 2019 levels thanks to Eat Out To Help Out but market ‘more unstable than ever’: Britain’s managed pub, restaurant and bar groups saw collective like-for-like sales bounce back to 2019 levels in August thanks to the government’s Eat Out To Help Out campaign, the latest Coffer Peach Business Tracker has revealed. But while food-led businesses forged ahead, drink-led operations still found trading tough, and the market is “more unstable than ever”. The London market also trailed significantly behind the rest of the country. With 85% of group-owned sites reopened, total sales across the whole managed pub, bar and restaurant market were still 12.2% below last August’s levels, but like-for-like sales in those businesses trading came out flat. Restaurants enjoyed the biggest boost last month, with group-owned sites that were open seeing collective like-for-like sales up 13.5% on August last year. But because only 65% of chain-owned restaurants that were trading back in February were open again, total sales across that part of the market were still down 10.9% on last year. Managed pub groups, which between them had 95% of their sites trading, saw like-for-like sales down 3.6% on last August and total sales down 9.4%. However, food-led pubs and pub restaurants did prosper on the back of the Eat Out To Help Out incentive with collective like-for-likes up 5.3% on last August and total sales down just 1.2%. In contrast, wet-led pubs saw like-for-likes down 11% and total sales down 16.3%. Across the managed pub market as a whole, food sales were up 12%, with drink sales down 15.3% on last August. Bar groups, which had 74% of their sites trading, had the worst of the month, with like-for-like sales down 27.6% and total sales down 37%. Regionally, London still struggled over August despite the assistance of Eat Out To Help Out. Like-for-like sales were down 13.4%, with total sales down 28.1%. In contrast, outside the M25, like-for-like sales were up 3.2% and total sales down just 7.9% on last August. While restaurants in London did, overall, record positive like-for-likes, up 2.6%, they still lagged considerably behind the rest of the country. Delivery accounted for 8.8% of sales among the casual dining groups in the Tracker cohort in August, down from 13.1% in July, but still up on the pre-lock-down percentage of 5.9% in February. Karl Chessell, director of CGA, the business insight consultancy that produces the Tracker, in partnership with The Coffer Group and RSM, said it would be interesting to see if the momentum of Eat Out To Help Out could be maintained with the government’s new legal restrictions in force. Trevor Watson, executive director, Davis Coffer Lyons added: “The boost to food-led establishments due to Eat Out To Help Out is short term; the longer-term trend is the redistribution in trade towards residential districts and away from commercial city centres and London, in particular. The autumn sees the end of furlough and, potentially, the end of the moratorium on lease forfeiture. These twin threats are the biggest possible challenge to the industry so, although the doors are open to many pubs and restaurants, the market is more unstable than it has ever been. Pictures of people eating out in pub gardens, and healthy looking like-for-likes present a misleading and artificial impression of where the market is right now.” At the end of August, underlying annual like-for-like sales for the whole market were down 21% on the previous 12 months, with total sales down 31.9%.

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