Flat August trading for Britain’s pub, bar and restaurant groups

14 September 2017

  • Like-for-likes sales ahead just 0.2 per cent nationally compared to last August
  • London had a particularly poor month, with like-for-likes down 1.6 per cent

Sales growth across the managed pub, bar and restaurant sector slowed in August, with collective like-for-like sales up just 0.2 per cent against the same month last year, latest figures from the Coffer Peach Business Tracker show.

The flat trading highlighted by the Tracker is down on the 0.6 per cent increases in same-store numbers recorded in both June and July.

'The wet weather can take some of the blame, with restaurant chains, which tend to do better when it’s raining, seeing a collective 1.1 per cent increase for the month against a 0.3 per cent decline among pub and bar groups,' said Peter Martin, vice president of CGA, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.

Regionally, London had a particularly poor month, with like-for-likes across the capital down 1.6 per cent, while the rest of the country saw a 0.8 per cent increase on August 2016.

'What will worry operators is that this performance is lagging inflation, now edging up towards 3 per cent, by some distance. The underlying like-for-like trend for the 12 months up to the end of August is better, up 1.3 per cent of the previous 12 month period, but that too is behind the inflationary curve,' added Martin.

'The sector has had to absorb significant cost pressures already this year, particularly around property costs and food inflation - and most operators have passed at least some of that on to consumers through price rises. While those menu increases don’t appear to have not hit sales, neither have they provided any noticeable revenue boost,' he said.

'The one positive point is that consumers are still going out to eat and drink, and although sales are sluggish and hard fought for at least they are not suffering the way other parts of the economy are, such as car sales,' Martin added.

Total sales growth in August among the 37 companies in the Tracker cohort was 3.5 per cent, reflecting the continuing if more subdued effect of new openings over the year, but down on the 3.7 per cent seen in July.

'These numbers reflect the tough summer that many pubs and restaurant businesses have suffered. There is no hiding. These like-for-like figures are well below inflation. For restaurants particularly they reflect the new openings over an extended period that have taken some trade from established operators. Pubs suffered from poorer weather in August compared to last year,' said Mark Sheehan, Managing Director at Coffer Corporate Leisure.

Paul Newman, head of leisure and hospitality at RSM, added:

'Promotional activity has increased significantly in 2017 and yet sales continue to stagnate, putting further pressure on margins. Despite this, the appetite of new entrants joining the market remains remarkably resilient with London set for a record 44 restaurant launches this month as reported by Hot Dinners. As consumer spending tightens and cost pressures increase, competition from new independents will simply add to the challenges being faced by existing operators.'

The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 37 operating groups, and is recognised as the established industry benchmark.

Pub and restaurant group sales performance for last 12 months

  Sept  Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug
LFLs  1.8% -1.0% 1.1% 1.1% 1.9% 1.7% -0.5% 4.4% -0.4% 0.6% 0.6% 0.2%
Total 5.0% 1.9% 4.1% 4.4% 4.4% 4.7% 2.1% 7.4% 2.4% 3.7% 3.7% 3.5%
Source: Coffer Peach Business Tracker