Inside track by Mark Wingett Last year the question on most operator’s lips was “how was December for you?” Fast forward a year, and now it’s “how was January?” The answer for most would surely be challenging. And that’s before you take into account the covering of snow the majority of the UK now finds itself under just as most potential customers have been paid. It’s very difficult out there. Last January, the knock-on impact of the adverse weather in December was everyone going out and spending, especially in the first two weeks, as a number of Christmas parties were deferred to January. So after the easier comparables experienced in December, operators are up against an unusually strong January, and therefore the momentum experienced over the festive season is in danger of being lost. Some sobering figures from Peter Backman at Horizons, shows that even the positive trading results reported last month may have seemed more impressive than they actually were. He says: “Our estimate is that because sales through the combined restaurants and pubs sectors fell by 7.2% in December 2010 to be worth £561m versus £549m in 2009, the market would have to had shown a 12.3% growth in December of 2011 to a value of £630m in order to get back to 2009 trading levels, allowing for inflation and the VAT increase. “Not surprisingly, no results have yet demonstrated growth of over 10% meaning that in real terms their performance has dropped.” From chatting to a few operators over the past week, it is clear that although there hasn’t been a complete return to the dark days of 2009 – as yet there’s not been a drop in revenue – there are some signs that discretionary spending at the start of the trading week has softened while weekends have got busier, a classic sign of consumers trying to reign in their spending. At the moment consumers seem to be happy to spend more per trip, even though they are going out less. All this it seems has led to many of the UK’s leading restaurant operators, with the help in some quarters of the former Paramount Restaurants estate, getting their expansions targets for 2012 secured now so they can concentrate on the task in hand for the rest of the year of getting consumers through the door. Especially in a year that is weighted in the favour – Diamond Jubilee, European Championships and Olympics – of their pub counterparts. For example, the acquisition by Carluccio’s of the four remaining Paramount restaurants added to those sites already secured in Paddington and Dorchester, has already taken it to over half of its target of opening 10 units in 2012. Jamie’s Italian has also picked up the six sites it intends to add to its UK estate this year. Discounts and vouchers will also remain the weapon of choice for most operators to keep consumers coming through the doors. The number of discounts and vouchers were higher pre-Christmas than in the same period in 2010, while January’s levels were thought to be the same as a year ago. It is unlikely the weaning off this “drug” will start during the first quarter. This year will certainly be challenging for the eating out sector and this current bout of adverse weather will add an extra hurdle to be surmounted. But these challenges are not insurmountable, and there remain many businesses which will continue to perform well and take market share. Those with the right brands, property, people and execution will continue to get stronger. Full steam ahead Last July, a lot of people were looking at Fuller’s and wondering what was happening at the Chiswick-based brewer and pub operator, questioning the handling of its approach for Capital Pub Company. After indicative offers of 175p and 200p a share from Fuller’s were dismissed as inadequate by Capital, the relationship between the two quickly turned fractious and Greene King swept in to further increase its presence in the capital. After also missing out on Geronimo Inns to rival Young’s, it’s not a stretch to think that Fuller’s was feeling slightly sore about the whole saga. Fast forward to last week, and with another 15 freehold pubs added to its estate, the company continues to bounce back rather well from the disappointments of last year, especially with further strategic acquisitions believed to be in the pipeline. The acquisition of the 15-strong package from Enterprise Inns for £22.9m means that Fuller’s has already added 29 pubs in its current financial year, increasing the size of its estate by 8%, and giving it in its own words “tremendous momentum” as it heads towards the summer. With one eye on a year where patriotism will be ramped up to heady levels and where the world’s attention will be on the capital, the brewer of London Pride is perfectly placed to be at the forefront of the continued renaissance of the managed pub sector. It may have taken a wrong step last year but it will be a pace setter in 2012. Although it may not be for a while, it will be interesting to see who wins the next time Fuller’s, Young’s and Greene King are up against each other. It is time to have your say in the Retailers’ Retailer of the Year Awards, the awards programme for business leaders in the eating and drinking-out market organised by M&C Report. To review the short-listed companies, concepts and individuals visit