11 May 2017

Pub and restaurant groups see return to sales growth in April

Managed pub and restaurant groups were back in growth in
April, with collective like-for-like sales up 4.4% compared to the same month
last year, latest figures from the Coffer Peach Business Tracker show.

“This month’s numbers compare with a
0.5% dip in like-for-likes in March, and the gap between the two can be largely
put down to the Easter holidays falling in March last year but in April this,” said
Peter Martin, vice president of CGA
Peach
, the business insight consultancy that produces the Tracker, in
partnership with Coffer Group and RSM.

“Although trading over the Easter
weekend was not as good this year compared to the four-day holiday in 2016,
down 3.8% on a like-for-like basis, the boost that the break provides to the
sector can still be seen in April’s trading growth. Taken together the two
months’ numbers show there is still underlying growth in the sector, and
especially among pub groups,” Martin added.

Managed pub operators saw a 6.1% jump
in collective like-for-like sales in April, compared to a much more modest 1.5%
increase for restaurant chains in the Tracker cohort.

“This can be put down in part to the
drier weather this year, with branded restaurants in London having a
particularly tough April, but we have also seen restaurant performance
generally slipping behind the pub sector in recent months,” said Martin.

On a regional basis, London was up 2.8%
in April, compared to a 4.9% like-for-like increase for outside the M25,
reversing the pattern seen in March.

“The fluctuations between London and
the rest of the country shows that there is still volatility in the market –
and despite the bounce in April, operators will remain cautious about prospects
for the rest of the year, and underlying growth is still fragile,” added
Martin.

Total sales growth in April among the
33 companies in the Tracker cohort was up 7.4%, reflecting the continuing
impact of new openings over the year. The underlying annual sales trend shows
sector like-for-likes running at 1.1% ahead for the 12 months to the end of March.

Trevor Watson,
executive director at Davis Coffer Lyons,
said: “
The impact of the Easter
weekend is clearly dominant in this month’s figures. There is an increasing
awareness that the rate of new restaurant openings has exceeded wet-led venues
in recent years and the industry and the statistics for the industry as a whole
reflect this. I think we can expect to see managed wet-led venues out-perform
restaurants in terms of sales growth for the next few months while consumer
confidence is expected to weaken.”

Paul Newman, head of leisure and hospitality at RSM, added: “This month’s figures show
that the habitual and prioritised nature of spending on eating and drinking out
continues to prevail. Operators need to remain innovative and flexible to cater
for changing demand patterns as economic uncertainty takes its toll on
discretionary spending. Those who indulge the consumers’ ongoing preference to
eat what they want, when they want, whether it’s a power breakfast, ‘unicorn’
cake or coal cooked meat, will thrive and prosper.”
 

  

The Coffer Peach Tracker industry sales
monitor for the UK pub and restaurant sector collects and analyses monthly
performance data from 34 operating groups, and is recognised as the established
industry benchmark. CGA Peach is part of CGA Strategy.