Pub and restaurant groups see sales growth slowing down

21 April 2016

  • Collective like-for-like sales grew just 0.6 per cent in March
  • Out-of-London trading marginally stronger than in the capital

Britain’s managed pub and restaurant operators are experiencing a sales slowdown at the start of 2016, latest figures from the Coffer Peach Business Tracker show. Collective like-for-like sales for March were up just 0.6 per cent on the same month last year, and come on the back of zero growth in February.

'It’s a generally flat market out there, and the March numbers will be particularly disappointing as they include Easter weekend trading, which fell in April last year. Although the weather over the four-day holiday depressed sales overall, Easter still normally provides a boost to the eating and drinking-out market, no matter how poor the weather,' said Peter Martin, Vice President of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group, RSM and UBS.

'Sentiment in the market is that 2016 will be a tougher year than last. Optimism levels are still positive, but down on this time last year, and we are already seeing a cutback in site openings among a number of operators,' Martin added. 'It will be interesting to see if confidence among both consumers and operators picks up once the uncertainty surrounding the EU referendum is out of the way.'

Restaurants chains performed marginally better than managed pub groups over the month, with collective like-for-likes up 1 per cent against 0.4 per cent. Regionally, like-for-likes grew 0.8 per cent outside of London and 0.4 per cent inside the M25, compared to March 2015 – a reversal of the trend seen in February when London performed better.

Total sales for the month among the 32 companies in the Tracker cohort were up 4.9 per cent on 2015, reflecting the effect of new openings over the past year.

The underlying annual trend shows sector like-for-likes running at 1.3 per cent up for the 12 months to the end of March, with little difference between London and the rest of the country.

Adam Spencer, Associate Director of Corporate Finance, said:

'Another month of sub-one per cent like-for-like growth figures will be giving investors in the UK eating and drinking out sector pause for thought.

Couple this with the EU referendum vote, which is now only two months away and we are expecting a notable slowdown in sector activity, with investment decisions being postponed until the outcome of the referendum is known.'

The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 32 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

  Mar  Apr  May  Jun  Jul  Aug  Sep  Oct  Nov  Dec  Jan  Feb 
LFLs   -0.3%  1.2%  2.1%  1.7%  1.1%  0.6%  1.2%  2.5%  -0.2%  1.3%  1.9%  0.0%
Total  3.7%  5.2%  6.2%  5.8%  4.8%  4.3%  4.6%  6.1%  3.5%  4.7%  5.4%  3.2%

Source: Coffer Peach Business Tracker

Participating companies receive a fuller detailed breakdown of monthly trading. To join the cohort contact Molly Nicholas.