15 August 2012

Damp July Pegs Growth for Pubs and Restaurant Groups

• Collective like-for-like sales slightly down by 0.2%

• Weather and run-up to Olympics make impact

The UK’s leading restaurant, pub and bar groups saw combined like-for-like sales dip marginally by 0.2% in July compared with the same month last year, according to latest Coffer Peach Business Tracker data. It follows a 1.3% like-for-like increase in June.

Total sales across the 25 companies in the Tracker sample were up by 3.6% on July2011, however, reflecting the increasing market-share that major players continue to win in the domestic eating and drinking out market.

“This is being driven by a consumer move towards brands, the importance of value as well as quality in customer choice and the continued roll-out of new sites by established operators,” said Peter Martin of Peach Factory, the business intelligence specialist that produces the sector Tracker, the sector’s biggest and most comprehensive performance barometer, in partnership with Coffer Group and UBS.

“The weather has not helped progress this year,” Martin added, “but Tracker data still shows the annualised like-for-like sales growth rate for the leading groups is currently running at 2.2% year-on-year, with total sales running at around 5.8% up. This may be only in-line with inflation, but this sector isbeating the economy as a whole when it comes to growth – and is something the Government should perhaps recognise.”

Olympic impact

“There has been much speculation of the impact of the Olympic Games on the pub andrestaurant market. Our July figures include the week running up to the opening ceremony and the first weekend, which was actually the worst performing week of the month, and the one that pushed an otherwise generally flat period into just negative territory,” said Martin.

“However, the full impact will not be seen until the August figures are published, although we do know from provisional figures that for the market as a whole the first full week of the Games was marginally up on the same week last year.”

Regional trading

This month’s figures also continue to show pub and pub restaurant operators delivering better like-for-like figures than high street casual dining. ”This is most marked within the M25 where restaurant groups are up against increasingly intense and diverse competition. Pubs seem to be doing better in London, and are providing part of that competition,” observed Peter Martin.

“In the market overall, chains are finding more growth away from the capital,” added Martin.

The Coffer Peach Tracker* industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance datafrom 25 operating groups, representing combined annual turnover of over £6 billion, and is recognised as the established industry benchmark.

“While only monthly headline figures are released to the public, participating companies receive a fuller detailed analysis of monthly performance, as well as weekly figures. It is a free service for the market, and open to any restaurant, pub or bar group with over £10m in annual sales,” explained Martin.

Trevor Watson, director at Davis Coffer Lyons, part of the Coffer Group, commented: “Although these statistics don’t at first sight look a gold medal performance, the fact that the overall figures are broadly neutral should probably be treated with both satisfaction and a degree of caution.

“Comparing trading figures in the restaurant and pub industry across the summers of 2011, 2012 and 2013 will be challenging as the English Riots of 2011 and the Olympic Games of 2012 distort trading patterns at the local level. The statistical background is complex, with underlying UK population growing, but visitor numbers to the UK (which has a profound effect on London trade) disappointingly down in H1 2012, as the Eurozone crisis continues and sterling strengthened.”

Jonathan Leinster, head of UBS European Leisure Research, added: “A particularly wet July has continued the trend of weather having a negative impact on pubs and restaurants this summer. But despite negative LFL growth, total sales were up 3.6% implying almost 4% increase in units.

“This is a continuation of the strong growth in openings with year-to-date new unit growth averaging 4.1%. This is a positive for the industry as it illustrates that brands are continuing their roll out schedules despite the tough economic climate. We believe consumers are as focussed as ever on value-for-money propositions offered by leading brands and this is encouraging further openings.”

Pub and restaurant group monthly sales performance for past 12 months

Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul

LFLs 0.6% 2.8% 0.9% 2.1% 9.9% -2.1% -3.7% 1.9% -2.0% 2.6% 1.3% -0.2%

Total 3.7% 6.9% 5.1% 6.2% 13.7% 2.2% 0.6% 6.3% 1.9% 6.5% 5.0% 3.6%

Source: Coffer Peach Business Tracker

Coffer Peach Business Tracker is powered by Demographix

About Coffer Peach Business Tracker

Peach Factory collects sales figures directly from 25leading 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, Marston’s, Wagamama, Las Iguanas, YO! Sushi, Novus (Tiger Tiger), Fuller’s, Barracuda, Carluccio’s, Young’s, Living Ventures, Amber Taverns, Hall & Woodhouse, Ed’s Easy Diner, Gaucho, Intertain and Le Bistrot Pierre.