Pubs in London and restaurants outside the M25 were September’s strongest performers as the sector enjoyed its 18th consecutive month of growth, the latest Coffer Peach Business Tracker shows.
The good weather aided “steady, consistent growth in eating and drinking out” according to the research, with collective like-for-like sales up 2.2% on last year. This compares to a 1.3% lfl jump in August.
One analyst predicted the positivity would give added impetus to the “current private equity feeding frenzy” in the sector.
London pubs and restaurants outside the capital fared best, with lfls up 4% and 4.8% respectively, while growth in drink-led pubs was the weakest part of the market with lfls essentially flat.
Total sales, reflecting the effects of new site openings, were 5.2% up on last September.
Peter Martin, vice-president of CGA Peach, which produces the tracker in partnership with Coffer Group, Baker Tilly and UBS, said September’s weather was a “welcome boost” to an already encouraging landscape.
He said: “Although the better than expected late summer weather helped the market, we are also seeing steady, consistent growth in eating and drinking out, which now stretches back 18 months.
“Looking at the underlying trend, the 28 companies in the tracker sample together recorded year-on-year sales for the 12 months to the end of September 2.7% up on 2013.
“Eating-out frequency also remains healthy, with the Peach BrandTrack consumer survey showing that 42% of the GB adult population eating out at least weekly, rising to 58% of 25-34 year-olds.”
Paul Newman, head of leisure and hospitality at Baker Tilly, said: “Already 2014 has seen increasing levels of corporate activity in the leisure and hospitality sector amid improving trading, rising consumer confidence and strong long-term projections for the eating and drinking-out market.
“The continuation of such positive lfl sales growth will do nothing to quell the current private equity feeding frenzy in the restaurant and bar sector and provides further impetus for those brands which are expected to consider exit options over the coming months.”
Mark Sheehan, managing director of Coffer Corporate Leisure, said: “These figures are a further demonstration of strength in the eating and drinking out sector and reflect both the improving economy and the gradual habitual change to drink and dine out more often.
“While the unseasonal warm weather was great for pubs it can present a challenge for restaurants especially those located in shopping centres. Landlords are now increasingly working to change this and we are seeing structural changes in the retail sector as they work to make shopping centres leisure destinations in their own right.”
Jarrod Castle, leisure analyst at UBS Investment Research, said: “Like for like sales growth for September was 2.2% compared to 1.3% for August, 2.2% in July and 0.4% in June, showing real improvement month on month. This leaves the 12-month moving average growth rate at 2.4% (against 2.2% in August) for like-for-like sales.”
