Groups see like-for-like sales fall 2.4% in January
13 February, 2013
Bad weather took its toll on the eating and drinking out market in January, with leading pub and restaurant groups collectively seeing a 2.4% drop in like-for-like sales against last year, according to latest Coffer Peach Business Tracker figures.
But the fall also comes against the backdrop of a steadily tightening market. Total sales for the 25 companies in the Tracker sample, which include the effect of new openings, were flat compared with January 2012.
“It would have been worse if not for the impact of a good New Year at the start of the month and a bumper last week, which appeared to have been boosted by pay-day,” said Peter Martin of Peach Factory, the business intelligence specialist that produces the sector Tracker, the sector’s biggest and most comprehensive performance barometer, in partnership with Coffer Group, Baker Tilly and UBS.
“The middle weeks of the month, which felt the brunt of the snow, were all significantly down on the same weeks last year,” added Martin.
Both pub and restaurant chains were generally equally affected by the downturn, as was trading inside and outside the M25.
The January trading figures come on the back of a flat December and a modestly successful Christmas holiday period, which saw the six weeks to 6 January producing a 2.1% like-for-like sales increase on the corresponding period 12 months earlier.
“The underlying trend, however, is of a tightening eating and drinking-out market,” said Martin. Year-on-year like-for-like sales up to the end of January were ahead just 0.5% on the previous 12 months, with total sales up 3.9%.
“These figures represent a downward trend in the rate of market growth since the summer. In August, year-on-year like-for-likes were running at +2.0%, but have shown a steady decline every month since then,” said Martin. “This points to 2013 being another tough and essentially flat year, with little give in spending. Innovative groups can do well but it is increasingly becoming a fight for market-share.”
David Coffer, chairman at The Coffer Group, said: “We do not believe that bad weather was wholly responsible for the drop in January trade. There was undoubtedly a trend of customers preserving their money, leading through the difficult festive period and beyond. If one ignores the impact of bad weather, only a neutral position would have been likely.
“It will be interesting to see in 2013 whether the dichotomy of lacklustre growth against spiralling capital and rental values continues. Despite the reasonably flat figures as shown by the Tracker in recent months, we are seeing no underlying let up in demand for leisure property and operators are still as aggressive as ever in competition for sites.”
Paul Newman, co-head of leisure & hospitality at Baker Tilly, added: “This month’s results are a little bleak, although with the media pressing headlines of ‘over spending’ this Christmas, it’s not really surprising that customers aren’t putting their hands in their pockets for eating and drinking out.
“Heightened pressure on finances combined with New Year resolutions, including detoxes and gym regimes, always make January a very tough trading. Given the trend in 2012 for little or zero growth, these results don’t really come as a surprise. Operators will no doubt be hoping to see their fair share of January’s pay cheques being spent on leisure and hospitality in the month ahead.”
Jonathan Leinster, head of UBS European Leisure Research, said: “It was a poor start to year. We note that the comparative was not difficult since LFL sales declined 2.1% in January 2012. The pattern of poor sales growth, with LFL sales in the calendar year only just positive, appears to be continuing. With cost inflation continuing then industry margins will remain under pressure.
“We also believe that investment in new space has been in decline for some time, probably reflecting the more difficult 2012 trading conditions after the pickup in 2011. It seems likely that investment in new sites will continue to deteriorate.”
The Coffer Peach Tracker* industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from operating groups, representing combined annual turnover of £6.4 billion, and is recognised as the established industry benchmark.
Coffer Peach Business Tracker is powered by Demographix
About Coffer Peach Business Tracker
Peach Factory collects sales figures directly 25 leading companies. 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 (Café 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 and La Tasca.
- The new Peach Report magazine - OUT NOW
- New openings: Greene King Hungry for more, Jamie's slims down
- May sales uplift for pub and restaurant chains
- Fullers managed pubs see 7% like-for-like growth
- New openings: TRG spreads Coast to Coast; Cosmo goes north, Peach south
- Fowle and Watson line up for Future of Finance panel
- Bramwell picks Wild Lime for high street pubs
- New openings: Pink Shed pop-up, Debenhams, Tea Monkey, Farm House
- M&B growing sales and profit in a 'tough market'