According to the latest figures from the Coffer Peach Business Tracker, March will be a month that Britain’s pub and restaurant groups will want to forget: snow and freezing temperatures across the country contributed to a 3% fall in collective like-for-like sales compared with March last year,. Total sales, which include the impact of new site openings, were essentially flat, registering a 0.2% drop.
March this year was the UK’s joint second coldest since records began more than 100 years ago: only 1962 has been colder.
A bad month all round
“Pubs and pub restaurants generally had a worse time than high street restaurant brands, with a 3.4%, compared to a 1.9% like-for-like sales fall. However, looking regionally, eating and drinking-out spending was hit equally both inside and outside London. Simply, it was a bad month all round,” said Peter Martin of Peach Factory the business intelligence specialist that produces the Tracker, the sector’s biggest and most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS.
“The damage was really done in the middle two weeks of March, when like-for-like sales across the groups in our sample were collectively down 4.8% and 11% – with some operators doing worse than that. Better trading at the end of the month, including the start of the Easter weekend, however failed to save the situation.
Easter significantly up
“The good news is that the four-day Easter holiday, as we reported earlier, was significantly up on Easter last year, with like-for-likes ahead 7%. The industry will hope that this is a sign of latent public demand for going out and that warmer more settled weather with bring improved trading,” concluded Martin.
The poor March figures came on the back of better trading for pub, bar and restaurant groups in February, when collective like-for-like sales had been up 3.3% on the previous February.
On a year-on-year basis, like-for-like sales for the sector remain positive. For the 12 months to the end of March, like-for-likes were running at +0.6% against the previous year.
Consumers are willing to spend
Trevor Watson, director at Davis Coffer Lyons, said: “The strong level of sales over the Easter weekend suggests that, when weather conditions allow, consumers are willing to spend on eating out. The overall numbers were predictably weak and we are now entering a period when like-for-like statistics will be affected by last year’s Diamond Jubilee celebrations, which could result in some strong figures in London in particular.”
Outlook remains upbeat
Paul Newman, co-head of leisure & hospitality at Baker Tilly added: “Notwithstanding the disappointing March data, our outlook on the sector remains upbeat. As reported over the weekend, the freezing conditions saw UK retail location footfall drop by over 5%. By comparison, this month’s data demonstrates continued resilience in the leisure and hospitality sector. This has encouraged further M&A activity with Little Chef and 3Sixty Restaurants reportedly joining the likes of Cote and Byron in considering transactions over the coming months. Advisors and shareholders alike will be hoping for a prolonged period of better weather to help heat up these processes.”
Pent-up demand
Jarrod Castle, leisure analyst at UBS European Leisure Research, said: “Weather has clearly had a significant impact on the eating-out industry. We believe that as we move into spring, a combination of pent-up demand, soft comparison – LFL growth was -2% in April 2012 – and momentum at the end of March may lead to more encouraging growth figures moving forward.”