Flat like-for-like sales in February reflect a growing sense that 2016 will be a tougher year than last, the latest Coffer Peach Business Tracker has shown.
While total sales among the Tracker cohort were up 3.2% on 2015, like-for-likes sales were 0%. Greater London had the best of February’s trading, with like-for-likes ahead 0.9%, against a 0.3% decline in the rest of the country. Casual dining chains collectively did better than the wider pub and bar market, with like-for-likes up 1.6% on February 2016 against a 0.8% fall for managed pubs.
Peter Martin, vice president of CGA Peach, which produces the Tracker, in partnership with Coffer Group, RSM and UBS, said: “The numbers will be a disappointment for the sector, coming on the back of a bright start to the year, with January like-for-likes up 1.9%, but they reflect a growing sense in the market that 2016 will be a tougher year than last.
“However, we are also seeing the rate of restaurant openings slow this year, as the market perhaps becomes a little more cautious.
The underlying annual trend shows sector like-for-likes running at 1.7% up for the 12 months to the end of February, with out of London just marginally ahead of the capital.
Trevor Watson, executive director, valuations, at Davis Coffer Lyons, said: “The market continues to show ‘steady as she goes’ progress in terms of overall sales, with like for like figures being pegged back by the rate of new openings. In spite of insatiable operator demand for sites, the rate of new openings does appear to be slowing slightly, which is a trend we expect to see continue for much of 2016.
“Although consumer confidence is steady, we expect to see some business investment decisions held back until after the referendum which could lead to increased corporate activity in Q3 and Q4 of 2016.“
Paul Newman, head of leisure and hospitality at RSM, added: “Although disappointing, it comes as no real surprise that the surge in supply and convergence across eating and drinking-out formats is now starting to slow growth and put downward pressure on like-for-like sales. Competition among operators is set to intensify and the winners will be those who can best balance site expansion with innovative menu development and competitive pricing.”
Jarrod Castle, leisure analyst at UBS Investment Research, observed that the flat like-for-like trading in February was in contrast to January at +1.9% and December at +1.8%, adding: “The 12-month moving average LFL growth rate also came in at 1.1% against 1.3% in January and 1.2% in December.”
