Top chains see like-for-likes up 1.3% in February

15 March, 2010

Leading pub and restaurant groups put January blues behind them

The UK eating and drinking-out market moved back into positive territory in February – or at least the country’s leading restaurant and pub operators did. The 15 major companies participating in the Coffer Peach Business Tracker collectively saw like-for-like sales up 1.3% against the same month last year. Total sales were ahead 3.0% on February 2009.

The results come as welcome relief after a poor January, when freezing weather conditions contributed to a dramatic 5% slump in like-for-like sales. February trading was a healthy 18% up on the previous month.

The monthly Coffer Peach Business Tracker figures are produced by Peach Factory in partnership with KPMG, UBS and the Coffer Group and monitor performance across the UK eating and drinking-out sector.

“This latest set of sales figures are back in line with trading seen during most of 2009, when the Tracker group collectively recorded nine consecutive months of steadily positive like-for-likes up until January,” said Peach Factory’s Peter Martin.

Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, said: “This should be considered to be a good result. Some of the improvement is due to easier comparisons. A year ago some businesses were suffering not only from the economy but from bad weather too. We also suspect that there has been a return to promotions by some operators, which will have helped the sales results for the month.”

Richard Hathaway, head of Travel, Leisure and Tourism at KPMG added: “Sales have bounced back post the snow, but consumer confidence and the uncertain economic outlook remain big challenges for the eating and drinking out sector this year. Potential clouds on the horizon include the threat of public sector spending cuts impacting jobs and hence consumer spending, and rumours of a potential VAT rise. Shrewd operators will be focusing on quality service and competitive pricing to keep customers coming through the doors.”

Trevor Watson, director at Davis Coffer Lyons, part of the Coffer Group, detects differences between London and the rest of the country, particularly as it affects the property market. He said: “The central London eating and drinking market continues to be very strong which is causing continued strong demand for quality restaurant and licensed properties in the capital. Shortage of quality stock in central London is also giving rise to a significant resurgence in rental and asset values generally.

”Away from the south east, the market appears to be lagging behind in trading terms and consequently in property terms. The market between London and the provinces is probably as big as it’s ever been.”

The market is expecting business to continue to be tough this year, and replicating 2009’s progress will be seen as success, added Peter Martin.

“Pertinently, Peach Report’s 2010 Business Leaders Survey, published in February, showed that the top priorities for bosses of pub and restaurant groups will be driving better service and the quality of customer experience in their operations. They are generally optimistic, but they recognise that consumer confidence and the general state of the economy will be their biggest challenges in the coming year.”

The aggregated results are:
Like-for-like sales change (against same month last year): + 1.3%
Total year-on-year sales change: + 3.0%
Monthly sales change (against January 2010): + 18.0%