Weather Boosts September Pub and Restaurant Sales
October 18, 2011
Britains leading pub and restaurant groups saw collective like-for-like sales grow 2.8% in September, according to latest Coffer Peach Business Tracker data. Total sales, which include the effect of new openings, were up 6.9% on September 2010.
Despite the gloom in other parts of the economy, the public is still prepared to go out to eat and drink and the hot weather at the end of the month provided an added boost for business, said Peter Martin of Peach Factory, the market consultancy which produces the sector Tracker, in partnership with KPMG, UBS and the Coffer Group. The data comes from 24 major pub and restaurant operators trading across the UK.
According to the Met Office, last month was the warmest September since 2006 and the equal-sixth warmest in the last 100 years with the average temperature 1.5 °C above the 1971-2000 norm. It also saw below average rainfall.
Both pubs and restaurants saw sales ahead of last year, although pubs saw the biggest boost from the good weather, said Martin.
The September figures follow a 0.6% increase in like-for-like sales in August, despite the effects of the riots, and a 1.0% increase in July. Month on month, September sales were 18% up on August, reflecting the fact that it was a five-week against a four-week month.
The eating out market is proving remarkably resilient, added Martin, although it remains a fiercely competitive marketplace. Consumers are turning to brands increasingly in search of quality, consistency and value, but the fight for customer loyalty is intense, with both pub and casual dining chains investing heavily in new concepts and revamping and rolling-out existing offerings.
As a result, the eating and drinking out-of-home market has continued to out perform the retail sector. According to the British Retail Consortium / KPMG Retail Sales Monitor, like-for-like retail sales were only 0.3% higher on September 2010, with total sales up 2.5%.
However, operators are aware that the market will remain tough, added Martin. Last month the Asda Income Tracker suggested that UK families were £14 a week worse off in August 2011 than in 2010.
David Coffer, chairman of the Coffer Group, commented: The September figures are indicative of the effect of post riot relief and some tremendous weather. It will be interesting and relieving for most operators if these high comparative figures continue the trend.
Richard Hathaway, Head of Travel, Leisure and Tourism at KPMG in the UK added: Leading pub and restaurant operators continue to outperform the general retail sector and like-for-like growth of 2.8% is quite encouraging especially, after seeing year-on-year growth fall to only token levels in July and August. Total sales growth up at 6.9% also demonstrates a robust and confident sector which continues to attract investment from pub and restaurant operators through new sites and offerings. Looking forward, however, poor consumer confidence, high inflation and the on-going squeeze on personal finances remain threats to meaningful growth in the sector and these are not likely to change anytime soon.
Jonathan Leinster, Head of UBS European Leisure Research, observed: Marstons is the only pub operator to have yet updated the market for the late September period, reporting like-for-likes of +2.9%, mirroring the Tracker data. We note that all the pub groups have been reporting that value deals were driving volumes.
UK pubs stocks have declined between 4% and 41% over the past three months, in part due to heightened concerns over UK consumer spending. However our recently updated UK household cash-flow indicates that cash-flow pre-savings should rise 2.5% in 2012, which would be similar to 2010 and a significant improvement on 2011. Consumers are still allocating discretionary spend to pubs and restaurants and we believe that consumers do find value in some of the pub offerings and maintain buy ratings on JD Wetherspoon, Marstons and Greene King.
