Closures and cold weather failed to put consumers off eating and drinking out in February, with collective like-for-like sales for pubs, bars and restaurants, up 0.2% nationally, compared with the same month last year, according to the latest Coffer Peach Business Tracker.
Managed pub groups performed better than the restaurant groups, which saw collective lfls up 1.3%, compared to a decrease of 1.5% for restaurant brands. London fared better than the UK, with lfls up 0.8%, compared with flat growth elsewhere, while the frequency of eating out remained stable.
Commenting on what its weekly tracking data has shown for March, Peter Martin, vice president of CGA, told MCA that snow over the first weekend of the month, and in the preceding week, had “seriously badly hit” figures March, “but we have also seen a bit of an uptick as well”. “It’s hard to say exactly where it is going, and you always get seasonal variations at this time of year, but the big test is Easter, which is always a good barometer for how the rest of the year is going to be,” he explained.
“Going out to eat and drink is what people do, but while there is some variation, frequency of going out is essentially flat – the issue is where people are choosing to go,” he said. “Although some chains are suffering, that doesn’t mean to say the sector itself is suffering,” he added. Its research shows people “are more willing than ever to try somewhere new”. “We are seeing that as people develop concepts and offer something new, it is keeping interest in the market – but unless you are still refreshing your brand you may not be getting the benefit of it,” said Martin.
Over the last 12 months, total sales growth, reflecting new openings as well as closures, was 3.8% for restaurant groups compared to 4.3% for managed pub and bar chains. Although the February numbers will bring some comfort to operators, they are still below inflation, and with the extra business costs around property, people and food prices, it remains a challenging trading environment, said Martin.
However he said that despite caution and uncertainty in the market, there was “a hell of a lot of confidence about how individual people think their own companies are going to go”.
On why managed pubs have managed to buck the trend, Martin said it is down to the investment that has been put into these businesses, “which I think is paying off”. “Pubs have got their acts together, they have got the food and drink mix right, the offers are better. I don’t think casual dining is dead, but we are seeing a bit of a sort out and I think perhaps we will see new players and perhaps refreshed brands coming through to attract customers,” he added.
Underlying like-for-like growth for the companies in the Tracker cohort, which represents both large and small groups, was running at 1.1% for the 12 months to the end of February, including 0.4% for casual dining chains and 1.4% for pub and bar groups.
Mark Sheehan, managing director of Coffee Corporate Leisure, said: “Contrary to media reports the eating and drinking out market remains stable, as these figures show. The restaurant sector has had terrible press over the past few weeks but in reality, consumers are still eating out. We also continue to see pub operators out performing restaurants.”
Paul Newman, head of leisure and hospitality at RSM, said that the snow that affected many parts of the country earlier this month could not have come at a worse time for the sector. “Operators would have been looking to shore up their finances ahead of March’s quarterly rent demands. This deadline typically coincides with a working capital low point for many and on the back of February’s weak data, could be the catalyst for further site closures and restructurings,”
Business insight consultancy CGA produces the tracker in partnership with Coffer Group and RSM.
