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Morning Briefing for pub, restaurant and food wervice operators

Thu 17th Mar 2016 - Coffer Peach Tracker – pace of restaurant openings slows as growth flattens
Coffer Peach Tracker – pace of restaurant openings slows as growth flattens: Managed pub and restaurant groups saw sales growth flatten in February, reflecting a “growing sense in the market that 2016 will be a tougher year than last”. Latest figures from the Coffer Peach Business Tracker show a 0.0% like-for-like sales rate for February against the same period last year. London enjoyed the best trading of all regions during the month, with like-for-likes ahead 0.9%, against a 0.3% decline in the rest of the country. However, total sales for the month were up 3.2% year-on-year, driven by new openings outside the capital. Peter Martin, vice-president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group, RSM (formerly Baker Tilly) and UBS, said: “The numbers will be a disappointment for the sector, coming on the back of a bright start to the year, with January like-for-likes up 1.9%, but they reflect a growing sense in the market that 2016 will be a tougher year than last.” Total sales for the month among the 31 companies in the Tracker cohort were up 3.2% on 2015, reflecting the continuing impact of new openings and investment in sites, particularly among restaurant groups outside of London. “However, we are also seeing the rate of restaurant openings slow this year, as the market perhaps becomes a little more cautious,” added Martin. Greater London had the best of February’s trading, with like-for-likes ahead 0.9%, against a 0.3% decline in the rest of the country. Martin said: “This may be something to do with the school half-term holidays. Casual dining chains collectively also did better than the wider pub and bar market, with like-for-likes up 1.6% on February 2016 against a 0.8% fall for managed pubs. Our CGA Peach Business Leaders survey, carried out among 260 senior executives in January, shows confidence about the market still high, with 75% either optimistic or very optimistic. However, that is down on the 93% recorded this time last year.” The underlying annual trend shows sector like-for-likes running at 1.7% up for the 12 months to the end of February, with out of London just marginally ahead of the capital. Trevor Watson, executive director, valuations, at Davis Coffer Lyons, said: “The market continues to show ‘steady as she goes’ progress in terms of overall sales, with like-for-like figures being pegged back by the rate of new openings. In spite of insatiable operator demand for sites, the rate of new openings does appear to be slowing slightly, which is a trend we expect to see continue for much of 2016. Although consumer confidence is steady, we expect to see some business investment decisions held back until after the referendum, which could lead to increased corporate activity in quarter three and quarter four of 2016.” Paul Newman, head of leisure and hospitality at RSM, said: “Although disappointing, it comes as no real surprise that the surge in supply and convergence across eating and drinking-out formats is now starting to slow growth and put downward pressure on like-for-like sales. Competition among operators is set to intensify and the winners will be those who can best balance site expansion with innovative menu development and competitive pricing.”

90% of drinkers demand to know more about what’s in their beer: A new study of British drinking habits has revealed consumers have become more selective in the beer they drink as the rise of craft-brewed ales continues to rise, with 90% interested in learning more about different beers and two-thirds wanting to know more about the ingredients. In the report by the Society of Independent Brewers (SIBA), 53% of respondents also believed it was important beer was brewed in the UK, with 46% believing craft beer is “made by small brewers rather than large corporations”. The report also revealed 24% of women are drinking more beer than they did two or three years ago. In total, 900 people were surveyed as part of the report that will be presented today (Thursday, 17 March) at the BeerX conference in Sheffield, organised by SIBA. Managing director Mike Benner said: “Just as wine drinkers understand the importance of different grape varieties, today’s beer drinkers are increasingly curious about different styles and what gives each beer its unique flavours. There has never been more choice and quality available to beer drinkers than there is right now and this is clearly reflected in the attitudes presented in this consumer research. For the vast majority of men and women who say they don’t like beer, what they really mean is ‘I haven’t found a beer I like’ – which was understandable when the choices were so limited. But the fact is we now have more different styles of beer being brewed in the UK than ever before. The flavour spectrum of beer has expanded massively in recent years and this has gone a long way to attracting new drinkers, including women.” BeerX, which showcases beer from UK independent craft brewers, runs until Saturday (19 March).

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