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Morning Briefing for pub, restaurant and food wervice operators

Wed 17th Aug 2016 - Coffer Peach Tracker – overall like-for-likes up 0.3%, London outperforms rest of Britain
Overall like-for-likes 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 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 with 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 during the past 12 months, especially outside 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.”

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