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Morning Briefing for pub, restaurant and food wervice operators

Thu 15th Feb 2018 - Sector like-for-likes up 0.6% in January, restaurant food waste app launches in London
Sector like-for-likes up 0.6% in January, drink-led businesses to see further growth with recovery for ‘well-run, sophisticated restaurant brands’: Britain’s managed pub and restaurant chains saw collective like-for-like sales increase 0.6% in January compared with last year, according to the latest Coffer Peach Business Tracker. Managed pub operators were ahead 1.0% nationally, driven mainly by drink-led businesses, which are expected to see further growth. Restaurant groups across the country collectively recorded flat trading – up 1.0% in London and down 0.3% outside the M25 – but a recovery for “well-run, sophisticated brands” is forecast. London traded better than the rest of Britain in January, with collective like-for-like sales ahead 1.6%, compared with 0.4% outside the capital. Managed pubs in London were up 2.0%. “A string of site closures announced by some of the sector’s more high-profile casual dining brands has done little to bolster confidence in the sector lately, but these latest figures suggest that overall the market remains relatively stable – people are continuing to go out to eat and drink,” said Phil Tate, chief executive of CGA, the business insight consultancy that produces the tracker, in partnership with Coffer Group and RSM. “But that doesn’t disguise the fact the market is experiencing increasing cost pressures on a number of fronts and competition is intense. Consumers have more choice than ever. Brands that may have over-extended themselves are now feeling the pain. Nonetheless, January is one of the quietest months of the year and also one usually most affected by weather, so we usually have to wait until later in the year to discover any real shifts in the market.” Coffer Group chairman David Coffer added: “Notwithstanding an increasing number of disposals and receiverships occurring mainly in the restaurant sector, these Coffer Peach Tracker figures for January show a degree of resilience against trend, especially in drinks-led businesses. As it is traditional for consumers to seek such venues during a recessionary or challenging political and economic period, we feel this trend will continue and there will be further growth in the drinks-led sector and also a recovery in well-run, sophisticated restaurant brands. It is interesting to note the drinks-led businesses that are comparatively more productive are those that are managed. Some would say an ‘adjustment’ in the restaurant sector is overdue following a lemming-like expansion programme from London to the provinces over the past five years or more. We believe lessons have been learnt and expansion will possibly be comparatively slower but operators will be redirecting investment into quality products, service levels and value. There are still challenges to be dealt with, especially property rates and the stabilising of employment from Brexit-affected countries. It still remains a difficult period for the food and beverage sector but the outlook still remains optimistic and positive.” Total sales growth among the 39 companies in the tracker cohort was 3.7% compared with January last year, reflecting the continuing if much more subdued effect of new openings. Underlying like-for-like growth for the sector was running at 1.1% for the 12 months to the end of January.

Karma app launches in London connecting consumers with surplus restaurant food, forecasts £30,000 sales boost per site: Karma, an app that allows consumers to pick up high-quality surplus food from restaurants, cafes and grocers at 50% discount, has launched in London. The team behind Karma said the app could potentially bring in £30,000 a year per site from food that would otherwise go to waste and open businesses up to a new customer base. Operators upload a list of surplus food to the Karma app that customers can order, pay for and collect. Initially, the app is operating at 50 London sites including Michelin-starred Aquavit, nine sites owned by all-day French restaurant and bakery business Aubaine, vegetarian self-service concept Tibits, and six sites operated by Hummus Bros. Karma has 250,000 users in Sweden and 1,000 restaurant partners. Free push notifications are sent to nearby users when a sale starts. Karma founder and chief operating officer Elsa Bernadotte said: “The interest has been fantastic from day one and, with Londoners being environmentally conscious, great foodies and highly digital in their food shopping, we think it’s a perfect match.”

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