Like-for-like sales across 27 leading pub and restaurant groups were virtually flat in February, with growth of just 0.2%, against relatively difficult comparatives with the same month last year.
The London market saw growth of 1.3%; outside the M25, like-for-likes declined by 0.3%, with restaurants the best performers. Total sales in February were up 2.7%, according to the Coffer Peach Business Tracker.
It contrasts to like-for-like growth of 7.2% in January 2014.
Trading in February was up against tough comparatives with the same month in 2013, when like-for-like were up 3.3% while there was a break from the heavy snow experienced in January and March that year.
Year-on-year, like-for-like sales for the 27 companies were running +2% up for the 12 months to the end of February, with total sales running 4.6% ahead. The London market continues to outperform the rest of the country, although outside of the M25 is also in long-term positive growth.
Paul Newman, head of leisure and hospitality at Baker Tilly, said: “After sparkling like-for-likes in January on the back of a strong festive trading period, further growth however small is viewed as extremely positive in a month hit by atrocious weather in many parts of the country.
“With the British Retail Consortium recently reporting that year on year sales in the retail sector have fallen 1% in the same trading period, these results offer further evidence that the consumer continues to favour eating and drinking out over shopping. The robust characteristics the sector is exhibiting align well with the positive M&A and IPO interest we are seeing from a number of corporate operators.”
Trevor Watson, director at Davis Coffer Lyons, said: “The recovery to normalised growth is now complete and we expect sales to further accelerate throughout the UK over the next 12 months.
“Demand from operators for sites in our core markets is increasingly strong, which is putting upward pressure on rents, premiums and property values. This, in turn, is leading to unprecedented prices being paid for a wide range of leisure properties – particularly in central London. The ongoing debate about whether an increase in national minimum wage will strengthen the recovery is an interesting one which operators and investors will need to keep a close eye on.”
Jarrod Castle, leisure analyst at UBS Investment Research, said: “While these figures appear disappointing following on from strong like-for-like growth in January, February was not able to benefit from weather effects. Within the M25, pubs and restaurants saw 1.3% like-for-like growth compared to the regions -0.3% like-for-like decline. This is in line with a longer-term trend of better growth in the capital.
“However, site growth is higher in the regions given total sales growth reached 2.8% outside London compared to 2% within the M25. The 12 months rolling average declined from 1.7% last month to 1.4% in February. Whilst this is still ahead of the historical average of 1.1%, this is a reversal of the improving trend we have seen since November 2013.”