Pub and restaurant groups boosted by November's London recovery

15 December 2016

  • November like-for-likes sales up 1.1 per cent nationally
  • London sees upswing after last year’s post-Paris nervousness

Managed pub and restaurant groups saw collective like-for-like sales grow 1.1 per cent in November against the same month last year, according to latest figures from the Coffer Peach Business Tracker – with London providing the biggest increase.

Like-for-like sales in the capital were up 3.5 per cent on last November, when sales were hit by public nervousness in the wake of the Paris terrorist attacks, with chain restaurants feeling the biggest impact.

'London saw like-for-likes fall 1.5 per cent last November and that had a knock-on effect on national figures which were down 0.2 per cent on 2014,' said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.

'So although this November’s overall trading increase is to be welcomed, it has to be put in context. Outside of London, groups recorded collective like-for-likes up just 0.3 per cent, which might be a more accurate reflection of the essentially flat nature of the eating and drinking out market post Brexit vote,' added Martin.

Pub groups had the best of trading last month, with collective like-for-likes up 1.7 per cent, and with drink-led pubs and bars performing better than food-led. Branded restaurant chains were up just 0.2 per cent nationally on November last year.

'These latest numbers come on the back of three consecutive months of sales growth in the sector in July, August and September following the EU-referendum, but a 1.0 per cent decline in October, so operators need to remain cautious with plenty of volatility, uncertainty and competition ahead,' Martin added.

'Confidence in the market is slowly returning after the Brexit vote, although as our latest CGA poll of senior executives shows, longer term optimism for the coming 12 months, at 36 per cent, is lower than confidence for the immediate six months ahead, at 50 per cent,' he observed.

Total sales growth in November, reflecting the impact of new openings, was 4.1 per cent among the 34 companies in the Tracker cohort.

The underlying annual sales trend shows sector like-for-likes running at 0.7 per cent ahead for the 12 months to the end of November, essentially in-line with previous months.

'Trading for eating and drinking out operators in November was up on a soft period the previous year. Many operators are cautiously optimistic about Christmas but more nervous about 2017. With pressure on many costs including wages, food and other commodity costs as well as rent and rates increases, operators need stronger growth to stand still. 2017 could be a year that many simply batten down the hatches, but there are still some excellent schemes and opportunities for expanding F&B concepts in the right locations,' said Mark Sheehan, managing director, at Coffer Corporate Leisure.

‘Generally positive results for November from across the UK, albeit compared to a relative low base month, will have provided hard-pressed operators with some respite in the run up to the all-important festive trading season. With consumer confidence predicted to falter going into the New Year, it will be interesting to see which operators break ranks to hike menu prices as the sector begins to see the full impact of the much heralded cost headwinds,’ added Adam Spencer, associate director at RSM Corporate Finance LLP.

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.

Pub and restaurant group sales performance for last 12 months

  Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
 LFLs   1.3%   1.9%   0.0%   0.6%   -0.8%   -1.4%   1.8%   0.3%    0.6%   1.8%   -1.0%    1.1%  
 Total 4.7% 5.4% 3.2% 4.9% 3.1% 2.2% 5.7% 4.0% 4.2% 5.0% 1.9% 4.1%

Source: Coffer Peach Business Tracker