Mild Post-Festive Hangover for UK Pubs and Restaurants
February 14, 2012
Leading UK pub and restaurant groups saw a collective like-for-like sales fall 2.1 per cent in January against the same month last year. Total sales, which include the effect of new openings, were still ahead 2.2 per cent on January 2011.
The figures come from the Coffer Peach Business Tracker, the industry sales monitor for the UK pub and restaurant sector, which collects monthly performance across 23 major pub and restaurant operators.
“The market won’t be too disappointed by these latest set of numbers, as they come on the back of a bumper December for the market and in a traditionally quiet trading month,” said Peter Martin of the Peach Factory, the business intelligence specialist that produces the sector Tracker, in partnership with KPMG, UBS and the Coffer Group.
The market recorded collective like-for-likes up 9.9 per cent in December on the same period last year, with total sale ahead 13.7 per cent.
“Also, sales in January last year benefited from a bounce-back in spending after a poor, snow-hit December, when many people stayed at home. As ever, the weather, and in particular snow, is a major influence on trading, as we have already seen in the first week of February,” added Martin.
“Restaurant and pub operators are generally optimistic about prospects for their businesses this year. Despite all the economic difficulties of the past two years, the market has shown real resilience, with the public still willing to go out and eat and drink. Sales figures have been positive for the majority of that time,” he added.
Mark Sheehan, Managing Director, Coffer Corporate Leisure, commented, “January was a tough trading month for pub and restaurant operators, with many experiencing the hangover after a relatively strong Christmas period. Although consumer confidence is weak, the outlook does appear rosier and investors are aggressively looking to invest in the sector as an alternative to retail.”
Richard Hathaway, KPMG’s Head of Travel, Leisure and Tourism added: “The January figures reveal a relatively slow start to 2012 and the likely impact of the current cold weather in the UK means February will probably not look very different, Trading conditions remain tough and they are likely to be with us for a while. However, given the tough economic environment, low consumer confidence and the continuing squeeze on disposable incomes, the growth that has been achived over the past 19 months is remarkable and shows just how resilient the UK’s eating and drinking out market is.”
Jonathan Leinster, Head of UBS European Leisure Research, commented:”Concerns over UK consumer spending are not new, and are likely to linger. Nevertheless, the operational performance of most pub groups has been relatively solid of late, with two-year growth last negative in May 2011. Despite rising unemployment consumers are still happy to allocate discretionary spend to eating and drinking out. The latest UBS UK household cash flow published in November indicates that cashflow pre-savings should rise 1.6 per cent in the current year, a significant improvement on 2011. We maintain ‘buy’ ratings on JD Wetherspoon, Marston’s and Greene King.”
Graph: Pub and restaurant group monthly sales performance for past 12 months
Source: Coffer Peach Business Tracker