16 July 2014

World Cup helps pub drink sales – but not eating-out

• Drink-led managed pubs report like-for-likes up 2.4%
• Restaurant chains see flat sales in June

Britain’s managed pub and restaurant groups saw collective like-for-like sales grow just 0.4% in June. While the World Cup helped push up trade in drink-led pubs, branded restaurants reported flat sales and pub restaurants saw a sales dip compared to the same month last year, according to latest data from the Coffer Peach Business Tracker.

“The World Cup may have helped drink sales in pubs, but it did little for the eating out market,” said Peter Martin of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group, Baker Tilly and UBS.

“Overall, drink-led managed pubs saw like-for-like sales up 2.4% on June last year, with drink sales ahead 2.8% and food essentially flat. The biggest boost came in the week of England’s first match, when LFLs in drink-led pubs and bars were up 10.9%. The following week, LFLs were ahead 3.7%,” added Martin.

“But after England’s exit the effect was lost and the market fell back more into balance. During those first two World Cup weeks, restaurant chains had seen sales down between 3% and 5%. Across the month as a whole, branded restaurants LFLs were flat, with pub restaurants down on last June. The truth is that while big set-piece events like the World Cup may boost part of the market, the overall effect on eating and drinking out is much more muted,” said Martin.

On a regional basis, June trading was strongest in London, with pubs in the capital the star performers. Like-for-like sales across the capital were up 1.6%, while outside the M25 like-for-likes were down 0.3% on last June. Total sales, which include the impact of new openings, were ahead 3.1% across the country as a whole.

“Despite the distortion of the World Cup, the 0.4% like-for-like growth for June is still an improvement on the 0.2% growth seen in May, and that result means that he 28 companies now contributing to the Tracker have collectively seen positive like-for-like sales for each of the past 15 months. Growth may not be exceptional but it is steady,” added Martin.

“Looking at the long-term trend, year-on-year like-for-like sales were up 2.7% for the 12 months to the end of June, with total sales running 5.4% ahead.”

Mark Sheehan, managing director of Coffer Corporate Leisure, said: “These results are positive, especially considering the eating-out market had to contend with sport on television every night from June 13 onwards. While pubs had a short term boost from England’s brief appearance, for them too it was a challenging month.  A 15th consecutive month of growth shows the underlying resilience of the eating and drinking-out markets as we look forward to a strong period of further growth.”

Paul Newman, head of leisure and hospitality at Baker Tilly, observed: “With the World Cup distorting June’s like for likes, it is difficult to make broader longer term comparisons. It is no surprise however, that wet-led establishments benefitted from the tournament more than restaurant chains thanks to the peak-hour friendly kick off times during its early stages.”

He added: “Owners of eating-out establishments around the country will either be raising an eyebrow or a glass to the news of Hony Capital’s £900m acquisition of Pizza Express from Cinven-owned Gondola. A landmark deal in the sector and the largest in Europe for five years, the deal could well signal a wave of far eastern interest in the UK leisure and hospitality sector, but also renewed vigour for the 500+ site pizza chain.”

Jarrod Castle, leisure analyst at UBS Investment Research, said: “Performance underlying the numbers is mixed. But, June’s figures leave the 12-month moving average growth rate at 2.7% for like-for-like sales, and 5.4% total sales growth, reflecting new casual dining sites in particular being opened outside London.”

The Coffer Peach Tracker* industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 28 operating groups, and is recognised as the established industry benchmark.

Coffer Peach Business Tracker is powered by Demographix

About Coffer Peach Business Tracker
CGA Peach collects sales figures directly 28 leading companies. 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), Spirit Group (Chef & Brewer, Fayre & Square), TGI Fridays, Tragus (Café Rouge, Bella Italia, Strada), Stonegate (Slug & Lettuce, Yates’), Marston’s, Orchid Pub Co, Wagamama, YO! Sushi, Novus (Tiger Tiger), Fuller’s, Carluccio’s, Young’s, Living Ventures, Amber Taverns, Hall & Woodhouse, Gaucho, Las Iguanas, Intertain, Tattershall Castle Group, La Tasca, Giraffe, Loungers, Byron and Le Bistrot Pierre.