Britain’s managed pubs, bars and restaurants saw like-for-like sales decline 0.9% in September as the public appeared to pull back on spending on eating and drinking out, according to latest Coffer Peach Business Tracker.
Restaurants in London were worst hit, suffering a 3.2% fall in collective like-for-like sales compared to September last year. Across the sector, trading was generally better outside the M25, down just 0.7%, compared to a fall of 1.6% in the capital.
Pubs and bars in London traded relatively better during the month, down just 0.5%, while restaurants away from the capital actually saw like-for-likes grow marginally last month, up 0.2%.
Total sales growth in September among the 38 companies in the Tracker cohort was 2.6%, compared to the same month last year, reflecting the continuing if much more subdued effect of new openings. Underlying like-for-like growth for the sector, for the 12 months to the end of September, was running at 1.2%, with total sales over the 12 months up 4.1%.
“Rising costs around property, tax, people and raw materials have increased pressure on margins already this year in what is an ever competitive market. Faltering sales will only add to sector concerns,” said CGA’s Peter Martin. “Interestingly, these weaker eating-out numbers come in a month when retail sales grew, fuelled in part by higher food prices in supermarkets, which may have helped dampened out-of-home eating.
“We have also seen the British Tourism Authority announce record numbers of foreign visitors and an increase in ‘staycations’. However, these do not seem to have helped London, where domestic tourism appears to be down.
“The one positive point is that consumers are still going out to eat and drink, and although sales are sluggish and hard won at least they are not suffering the way other parts of the economy are, such as car sales.”
Paul Newman, head of leisure and hospitality at RSM, said: “There’s no getting away from the fact that September has been a fairly dismal month for casual dining operators, especially in the capital. These sales numbers continue to be underpinned by the growing influence of food delivery and fierce discounting between brands. Operators will hope that a focus on premiumisation over the festive period will help to claw back some of this lost margin.”
