Pub and restaurant chains see sales slip in October

17 November 2016

  • Overall like-for-likes sales down 1.0 per cent on October 2015
  • Rugby World Cup hangover hits London trading in particular

Managed pub and restaurant groups saw sales slip in October, with collective like-for-like sales down 1.0 per cent on the same month last year, according to latest monthly figures from the Coffer Peach Business Tracker.

London saw the biggest fall, with like-for-likes 2.5 per cent down on October 2015, with much of this being put down to the boost eating and drinking-out, especially in the capital, received from last year’s Rugby World Cup. Outside of the M25 like-for-likes fell just 0.5 per cent.

'In October last year, like-for-likes were up 2.5 per cent across the country, and ahead a bumper 3.8 per cent in London, largely on the back of the popularity of the rugby tournament, with pubs doing especially well. This last month we seem to have seen the downside of that,' said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.

'We have had three consecutive months of positive sales growth in the sector following the EU-referendum, but these October figures demonstrate that operators need to remain cautious with plenty of volatility, uncertainty and competition out there in the market,' Martin added.

Overall, casual dining chains saw a 0.7 per cent like-for-like decline in October, with pub groups down 1.2 per cent. London pubs were down 3.3 per cent on the same month last year. 

Total sales for the month among the 34 companies in the Tracker cohort were up 1.9 per cent on October 2015, reflecting the fact that leading groups are continuing to open new sites.

The underlying annual sales trend shows sector like-for-likes running at 0.6 per cent up for the 12 months to the end of October, little changed from the previous month.

‘Although the sector is expecting some strengthening headwinds, at Davis Coffer Lyons we are finding strong undiminished demand for restaurants and other licensed property in our core markets. Demand for property in London and various provincial ‘hotspots’ remains unchanged, proving that the current successes and failings within the leisure and hospitality sector do vary considerably around the country. As we approach 2017, we may start to witness some areas with slower rental growth due to the pressure of food costs, wages and rates, but premiums will certainly hold for landmark or key leisure pitches with high footfall,’ said Trevor Watson, executive director, valuations, at Davis Coffer Lyons.

Paul Newman, Head of Leisure and Hospitality at RSM, added: 

‘Although October will be viewed as a disappointing month for many, the longer term trend over the last 12 months is of slightly positive LFL growth which is largely reflective of the low-growth economic environment we are living in.

‘However a perfect storm of rising inflation, relatively full employment and a potential interest rate hike on the horizon could result in an increasingly difficult trading environment for operators. Christmas leisure and retail spend results this year will be nervously anticipated as a bellwether of how confident consumers feel about their prospects going into the new year.’

Overall, casual dining chains saw a 0.7 per cent like-for-like decline in October, with pub groups down 1.2 per cent. London pubs were down 3.3 per cent on the same month last year. 

Total sales for the month among the 34 companies in the Tracker cohort were up 1.9 per cent on October 2015, reflecting the fact that leading groups are continuing to open new sites.

The underlying annual sales trend shows sector like-for-likes running at 0.6 per cent up for the 12 months to the end of October, little changed from the previous month

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

  Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
 LFLs   -0.2%   1.3%   1.9%   0.0%   0.6%   -0.8%   -1.4%   1.8%   0.3%    0.6%   1.8%   -1.0%   
 Total 3.5% 4.7% 5.4% 3.2% 4.9% 3.1% 2.2% 5.7% 4.0% 4.2% 5.0% 1.9%

Source: Coffer Peach Business Tracker