Pub and restaurant groups saw collective like-for-like sales increase 1.2% in May, against the same month last year. Total sales, including the impact of new openings, were up 4.5%, according to latest figures from the Coffer Peach Business Tracker.
The London market had the healthiest growth, with like-for-likes up 1.8%, and with managed pubs in the capital performing particularly strongly.
“After a poor, weather-affected start to the year, operators will be pleased to see some real growth in the market,” said Peter Martin of Peach Factory, the business intelligence specialist that produces the Tracker, the sector’s most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS.
“Despite May being colder and wetter than average, the public have shown they still have the appetite to go out and eat and drink,” Martin added.
Pubs and bars
However, sales growth was not uniform across the market. While pubs and bars in London had a good month, collective like-for-likes for those outside the M25 were essentially flat, with drink-led pubs seeing a like-for-like sales decline.
Restaurant chains
In contrast, mainstream restaurant chains saw a better performance away from London, both in terms of like-for-like and total sales growth. “Much of the market’s new openings are coming from the branded casual dining sector outside of the M25,” Martin added.
Underlying growth trends also improved last month. On a year-on-year basis, collective like-for-like sales for the 27 companies in the Tracker sample were ahead 1.0% for the 12 months up to the end of May against the previous 12 months. Total sales were running ahead 4.1% year-on-year.
Trevor Watson, director at Davis Coffer Lyons, said: “Although London performed strongly, the underlying trade across the country still looks fragile. The weather in May 2013 was below the long-term average. However, it was better than May 2012. Recovery in the housing market, particularly in the south east, is giving rise to greater consumer confidence and I expect the statistics to improve over the summer months. “
International brands seeking to enjoy UK market
Paul Newman, co-head of leisure and hospitality at Baker Tilly, said: “The UK consumer’s ability to maintain eating and drinking out spend in a benign economic climate continues to be impressive. As such, the UK is increasingly being targeted by international brands seeking to exploit strong positive headwinds. US burgers chains Five Guys and Shake Shack are following the likes of Chipotle by testing their concepts in the London market and Jumeirah-owned brand Noodle House is also poised to hit the UK over the coming months. While great news for the consumer, these nimble and well-funded market entrants are likely to increase the pressures facing incumbent operators in an already highly competitive marketplace.”
Accelerated expansion outside London
Jarrod Castle, leisure analyst at UBS European Leisure Research, added: “The bounce back continues as UK pubs and restaurants grew LFLs by 1.2% – a good return to growth following LFL figures of -3% in March and 0.1% in April. London continues to outpace the regions, but site expansion is slower.
“The performance gap between sites inside and outside the M25 has narrowed from last month, but is still significant with pubs and restaurants outside the capital seeing 0.8% LFL growth versus 2% for sites in London. Despite weaker performance, the brands surveyed continue to accelerate their expansion outside the capital. We estimate site growth of 3.8% compared to 2.4% within the M25.
About Coffer Peach Business Tracker
Peach Factory collects sales figures directly from 27 leading companies, representing combined annual turnover of £6.4 billion. Participants include Mitchells & Butlers (owner of Harvester, Toby, Browns, All Bar One etc), Pizza Hut, Whitbread (Beefeater, Brewers Fayre, Table Table), Gondola (PizzaExpress, Zizzi, ASK, Byron), Spirit Group (Chef & Brewer, Fayre & Square), TGI Fridays, Tragus (Cafe Rouge, Bella Italia, Strada) Stonegate (Slug & Lettuce, Yates), Marston’s, Orchid Pub Co, Wagamama, YO! Sushi, Novus (Tiger Tiger), Fuller’s, Bramwell Pub Co, Carluccio’s, Young’s, Living Ventures, Amber Taverns, Hall & Woodhouse, Gaucho, Las Iguanas, Intertain, Tattershall Castle Group, La Tasca, Giraffe and Le Bistrot Pierre.