Latest research from CGA Strategy’s Trading Index highlights that like for like sales in Managed Food Pubs within the M25 are worse than outside the M25 and suggests that the food pub market may be becoming saturated.
Whilst total Managed Food Pub sales within the M25 have increased year on year by +6.7%, with the rest of the country performing at +5.1%, this is due to growth in supply and investment. LFLs for Food Pubs within the M25 are down -1.5% in the last year, with wet sales of -1.7% joining even larger food sales declines of -2.6%. Food Pubs outside the M25 have conversely seen a LFL growth in food sales of +1.2%.
Supply exceeding demand
Growth in supply is exceeding growth in demand, and established outlets are being squeezed as new openings steal share. This is particularly true of Food Pubs as a large proportion of new openings have a solid food component as part of their offer.
This decline in performance within the M25 does seem to be restricted to Food Pubs: we see LFL sales growth in Bars of +2.2% compared to an average -1.9% LFL decline for Bars outside of the M25.
CGA’s Scott Elliott:
“We are seeing a massive influx of food led concepts into the London market, which is squeezing LFL trends in the established food venues. That said, we don’t see this happening in managed bars and wet led venues where outlets within the M25 take roughly 25% more revenue than in other locations, with more positive LFL’s.”
Saturated food market?
Is the food pub market becoming slightly saturated? Possibly, and these kind of metrics should be watched closely. Moving beyond food pubs, the evidence suggests that for managed operators the London market still offers higher revenues and better LFL’s than other parts of the country.