Bar groups continued to see a drop in sales despite overall growth in like-for-like sales across managed restaurant, pub and bar groups in May, according to the latest Coffer CGA Business Tracker.

Total like-for-like (lfl) sales increased by 5.6% last month, driven by a succession of bank holidays, including the King’s Coronation, with pubs recording the best performance +8.8% up on the same month in 2022.

However, restaurants saw less buoyant growth, with sales up by 2.7% and bars recorded a 6.6% drop in sales – this follows a 9.1% decline in April.

While overgrowth was not as strong as seen in April +10.4%, which took in the Easter and early May bank holidays.

The tracker data – produced by CGA by NIQ in partnership with The Coffer Group and RSM UK – suggests the rail strikes and fragile consumer confidence continue to impact the frequency of visits to pubs, bars and restaurants.

But there are more positive signs regarding the recovery of London’s hospitality sector, with managed group’s sales increase above inflation levels of +12.6% year-on-year – more than twice the level of growth seen beyond the M25 last month (+4.9%).

Commenting on the figures, Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “Managed hospitality groups continue to be challenged by soaring costs, the squeeze on consumer spending and rail travel disruption, making inflation-adjusted growth tough.

“Nevertheless, eight positive months in a row have shown that demand for eating and drinking out remains strong, especially around holidays and big national occasions. As inflation falls and discretionary spending stabilises, we can be cautiously optimistic about a return to real-terms growth in the second half of 2023.”

Paul Newman, head of leisure and hospitality at RSM UK, added: “The next few months will be telling, particularly in London which experienced inflation-busting performance in May compared to the rest of the country.

“Now that the King’s Coronation is behind us, the capital’s long-term recovery is dependent on further momentum from inbound tourism. Chinese tourists remain cautious and are staying closer to home for now leaving operators to wonder if the capital’s revival will be sustained during the summer months or whether May was a one hit wonder.”

Mark Sheehan, managing director at Coffer Corporate Leisure, said that in addition to the impact on sales from inflation, traditional pub, bar and restaurant groups are dealing with increased competition from a wide range of new offers including experiential concepts and food markets which are competing with more conventional offerings. “The sector is hoping the warmer weather in June can help kickstart a real recovery in numbers.”