17 January 2012

Big December Sales Boost for Pub and Restaurant Chains

Like-for-like sales up 9.9%
People still going out to eat and drink

Britain’s leading pub and restaurant groups enjoyed a major sales boost over Christmas and New Year. Collective like-for-like sales for the month of December were up 9.9% on the same period last year, with total sales, which include the effect of new openings, ahead 13.7% on December 2010.

The figures come from the Coffer Peach Business Tracker*, the industry sales monitor for the UK pub and restaurant sector, which collects monthly performance data from 23 major pub and restaurant operators.

“Much of the increase can go down to the fact that there was no snow this December, which disrupted trade last year. However, the underlying trend is still encouragingly positive,” said Peter Martin of Peach Factory, the business intelligence specialist that produces the sector Tracker, in partnership with KPMG, UBS and the Coffer Group.

“Last December, like-for-like sales were down 4.2% on 2009, with total sales falling 3.4%, as snow badly disrupted business in the run up to Christmas. Nevertheless, even allowing for that, December 2011 like-for-like figures are still a healthy 5.3% up on two years ago,” added Martin.

“Despite the continuing economic gloom, people are still going out to eat and drink – particularly over holiday periods. The leading pub and restaurant operators have worked hard to keep their offers fresh and relevant, and have come through the downturn in relatively good shape – certainly better than p[arts of the retail market.

“This is also reflected in the fact that December was the sixth month running that the eating and drinking-out-of-home market has seen positive trading. Like-for-likes increased 2.1% in November, 0.9% in October, 2.8% in September, 0.6% in August and 1.0% in July,” added Martin.

The almost 10% jump in pub and restaurant group numbers last month was in contrast to the retail sector, which saw only a 2.2% increase in like-for-like sales in December, according to the British Retail Consortium / KPMG Retail Sales Monitor.

Trevor Watson, director at Davis Coffer Lyons, commented: “Notwithstanding the favourable weather in December 2011 as against 2010, these figures are a strong endorsement of how well pub and restaurant operators are doing in driving their businesses forward.

“Against a background of fragile consumer confidence, consumers are still choosing to spend their leisure time and money eating away from the home. This is because operators are continuing to offer improvements in service and value. Brands with representation in regional shopping centres, leisure parks and airports in particular are experiencing relatively strong trading conditions, while traditional high street locations are generally finding trading more challenging.”

Richard Hathaway, KPMG’s Head of Travel, Leisure & Tourism, added: “The major pub and restaurant operators saw a significant rebound in sales last month. This comes as a welcome relief for the sector after three very difficult festive periods in a row. In December 2008 operators felt the first big impact of the recession, December 2009 saw little year on year improvement – like for likes recovered by less than 3% that year – and then December 2010 saw the big chill.

“December also saw total sales growth again outstrip like for like sales growth, by almost 4%, reflecting the impact of continued investment in new openings by the UK’s major operators in 2011. This demonstrates the confidence shown in what remains a relatively robust sector, despite the weak economic and consumer environment.”

Jonathan Leinster, Head of UBS European Leisure Research, commented: “UK pubs stocks have continued to weaken, down on average 27% in the last year, in part due to ongoing concerns over UK consumer spending. Today’s numbers suggest that pub spending around the holiday period was far more buoyant than results from high street retailers might imply, although we don’t expect this to mark a new trend. The latest UBS UK household cash flow published in November indicates that cashflow pre-savings should rise 1.6% in the current year, a significant improvement on 2011. We believe that consumers do find value in some of the pub offerings and maintain ‘Buy’ ratings on JD Wetherspoon, Marston’s and Greene King.”

About Coffer Peach Business Tracker
Peach Factory collects sales figures directly from 23 leading companies every month. Participants include Mitchells & Butlers (owner of Harvester, Toby, Browns, All Bar One etc), Pizza Hut, Whitbread (Beefeater, Brewers Fayre, Table Table), Gondola (PizzaExpress, Zizzi, ASK, Byron), Tragus (Café Rouge, Bella Italia, Strada), Stonegate (Slug & Lettuce, Yates’), Spirit Group (Chef & Brewer, Fayre & Square), TGI Fridays, Orchid Pub Co, Wagamama, Novus (Tiger Tiger), Youngs and Fullers.

For more comment contact:
Peter Martin, Peach Factory
01704 550383(office); 07889 209896 (mobile)

Claudia Robinson, Coffer Group
0207 299 0709

Katrin Boettger, KPMG
0207 896 4232

Richard Morton , UBS Media Relations
+44 20 7568 0175

About Peach Factory:
Peach Factory is a specialist business intelligence business, providing insight, analysis and access to the eating-out and drinking-out markets. It produces sector research and operates the Peach Network business network for senior executives across the sector. Business Tracker collects sales data from participating companies on a totally confidential basis to produce aggregated figures for the sector as a whole every month.

About Coffer Group
The Coffer Group is the leisure property industry’s leading advisory business. Built on nearly 40 years’ experience in the sector, the group combines the UK’s leading agency and corporate advisory leisure property businesses, Davis Coffer Lyons (DCL) Coffer Corporate Leisure (CCL) and hotels specialist division Coffer Hotels. The group deals exclusively with all types of leisure property, covering restaurants, bars, nightclubs, pubs, shopping centre food outlets, health and fitness, leisure schemes, theatre, golf courses, hotels and casinos. Its services are comprehensive including both consultancy and transaction based advice on single businesses and properties through to multi-million pound portfolios.

About KPMG:
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with nearly 11,000 partners and staff. The UK firm recorded a turnover of £1.6 billion in the year ended September 2010. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 150 countries and have more than 138,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. KPMG International provides no client services.

About UBS:
UBS is a leading global wealth manager, a leading, global investment banking and securities firm and one of the largest global asset managers. In Switzerland, UBS is the market leader in retail and commercial banking.