Restaurants toil in summer heat, while pubs make hay

20 August 2018

  • Managed pub like-for-like sales up 2.7 per cent against last July
  • But restaurant groups see hefty 4.8 per cent drop in trade

July’s heatwave was good news for Britain’s pubs – but heaped more pressure on the country’s restaurant chains, latest figures from the Coffer Peach Business Tracker show. Managed pub and bar groups saw collective like-for-like sales rise 2.7 per cent against last July, while sales across restaurant groups plummeted, down a substantial 4.8 per cent in like-for-like trading.

Overall, the differing fortunes of pub and restaurant businesses cancelled each other out, with the combined managed pub, bar and restaurant sector seeing like-for-likes flat in July, recording exactly 0 per cent growth.

“Continued sunshine and England’s longer than expected participation in the World Cup meant July followed a similar pattern to the previous month of June, when pubs were up 2.8 per cent, except that restaurants were hit even harder. The fall of 1.8 per cent in trading in June just got worse in July,” said Peter Martin, vice president of CGA, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.

“Drink-led pubs and bars performed by far the strongest with like-for-likes up more than restaurants were down. Food-led pubs also suffered in the sun with negative like-for-likes, although not as dramatically as the restaurant operators,” said Martin. “It seems people just wanted to go out for a drink. Across managed pubs and bars drink sales were up 6.6% for the month, with food down -3.0 per cent.”

Paul Newman, head of leisure and hospitality at RSM said, “These results continue the trend we’ve seen since the end of April. Weather and the impact of major social or sporting events remain the biggest factors when it comes to sales in the out-of-home market. It comes as no surprise that restaurant groups continue to struggle, albeit a sales drop of 4.8 per cent year-on-year will be particularly painful on top of ongoing cost pressures. The long hot summer could not have come at a worse time for food-led operators and time will tell whether the more moderate temperatures we’ve experienced in August will provide some much-needed respite.”

Underlying like-for-like growth for the 47 companies in the Tracker cohort, which represents both large and small groups, was running at 0.5 per cent for the 12 months to the end of June, down slightly from the 0.7 per cent at the end of June.

Trevor Watson, Executive Director at Davis Coffer Lyons said, “London had a particularly strong month with overall like-for-like sales up 2.6 per cent. This was driven predominantly by the capital’s pubs market – buoyed by England’s unexpected progression at the World Cup – which were trading 6.1 per cent ahead. The rest of the country had a more difficult period with like-for-like sales down 0.9 per cent. Restaurant trading fell a painful 5.6 per cent─compared with 2.8 per cent down in the capital─with pub like-for-likes up just 1.7 per cent despite the football.”

Total sales growth across the pub and restaurant cohort, which includes the effect of new openings, was 2.7 per cent in July, reflecting the slow down in brand roll-outs, and running at 3.6 per cent for the 12 months to the end of the month.

The Coffer Peach Tracker industry sales monitor for the UK pub, bar and restaurant sector collects and analyses performance data from 47 operating groups, with a combined turnover of over £9bn, and is the established industry benchmark.