Holiday season brings slowdown in eating and drinking-out growth

10 September 2015

  • Like-for-likes up 0.6 per cent in August against same month last year
  • Weaker performance from restaurants; stronger from pubs 

Britain’s managed pub and restaurant groups saw sales growth slow in August. Collective like-for-like sales were up just 0.6 per cent on August last year, latest figures from the Coffer Peach Business Tracker show. Total sales, including the impact of new openings, were up 4.3 per cent.

London, bolstered by strong trading in pubs, fared slightly better than the rest of the country, with like-for-likes up 1.0 per cent against 0.5 per cent for outside the M25. Total sales, however, grew most out of London, up 5.0 per cent against 2.4 per cent for inside the M25 - reflecting the continuing investment in new openings, especially among branded restaurants, away from the Capital.

'The sector remains in growth mode, but it seems both the weather and holidays abroad played a part in making this August only marginally better than last,' said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group, RSM and UBS. 

The August numbers follow steady but sustained like-for-like growth of 1.1 per cent in July, 1.7 per cent in June and 2.1 per cent in May.

'More people flying abroad for holidays this year - with Gatwick Airport reporting its busiest ever August bank holiday weekend - will have had an effect on August trading,' Martin said. 'The fact that the retail sector had a poor month with sales actually down on last year won’t have helped some restaurants either.'

'Although the weather this August was nothing to write home about, August 2014 was particularly cold, which resulted in a decline in pub sales and a boost for restaurants in 2014. This year we seem to have seen a corresponding recovery for pubs and more modest progress for restaurants,' he added.

Drink-led pubs, which account for about a third of the Tracker sample, saw collective like-for-likes up 2.8 per cent on August last year, with casual dining chains, another third of the cohort, up just 0.4 per cent nationally, and down in London. Pub restaurants and food-led pubs, making up the other third of the sample, were down for the month.

The Coffer Peach data comes directly from 31 participating companies, including a cross-section of managed operators, from major players such as Mitchells & Butlers, Whitbread, Stonegate, Pizza Hut and Pizza Express to smaller, and sometimes regionally-based, groups such as Living Ventures, Hall & Woodhouse, Byron, Loungers, Peach Pub Co and Bistrot Pierre. (See full list below)

Paul Newman, head of Leisure and Hospitality at RSM, said:

'A continuation of the positive trend in LFL sales, albeit marginal, will be seen by operators as a positive result given the late timing of the summer bank holiday and bad weather for much of August. We are seeing a number of well-funded, emerging young brands posting market-beating sales and we expect the larger operators to find it increasingly hard to maintain historic rates of LFL growth in the face of such stiff competition.'

Trevor Watson, Director at Davis Coffer Lyons, part of the Coffer Group, said:

'The reduction in the rate of growth is largely a reflection of the much steeper drop in retail sales that has been reported across the UK during the same period. While the F&B market continues to outperform retail, reduced activity in shopping centres and high streets will have led to subdued revenues in restaurants in these locations. We predict a significant improvement in the figures as we move into the autumn months, which will be underpinned by strong performances from leisure parks as a result of a number of forthcoming major new film releases.'

Jarrod Castle, Leisure Analyst at UBS Investment Research, observed:

'The trend continues to be one of moderating like-for-likes. The 12-month moving average growth rate moderated to 1.5 per cent from July's 1.9 per cent and 1.8 per cent in June for like-for-like sales, while total sales growth was 5.4 per cent against July’s 5.5 per cent and June’s 5.45 per cent.'

The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 31 operating groups, and is recognised as the established industry benchmark.

Pub and restaurant group sales performance for last 12 months 

  Sep Oct Nov Dec Jan Feb Mar Apr  May Jun Jul Aug
LFLs  2.2% 2.2% 3.4% 1.9% 1.3% 1.6% -0.3% 1.2% 2.1% 1.7% 1.1% 0.6%
Total 5.2% 5.7% 6.8% 5.6% 5.8% 5.8% 3.7% 5.2% 6.2% 5.8% 4.8% 4.3%

Source: Coffer Peach Business Tracker