Peach Report

Like-for-likes slip -1.2% in May, after April gain

14 June, 2010

Later school half-term holiday affects business

Trading for the country’s top restaurant and pub groups remains a challenge, with collective like-for-like sales slipping -1.2% in May against the same month last year, according to latest figures from the Coffer Peach Business Tracker. Total sales, which include those from new openings, were marginally ahead at +0.3% on May 2009.

The monthly Tracker figures are produced by Peach Factory in partnership with KPMG, UBS and the Coffer Group and monitor performance across 15 leading pub and restaurant operators. Companies taking part in the survey include Mitchells & Butlers, Whitbread, Pizza Hut, Punch Pub Co, Gondola and Tragus.

”Like-for-like figures have been up-and-down since the start of the year: falling –5% in January, with the snow; up 1.3% in February; slipping back by –0.4% in March; before registering a +0.7% increase in April,” said Peach Factory’s Peter Martin. “Part of the reason for May’s fall will be down to the fact that school half-term fell in the first week of June this year, rather than in the last week of May as last time.

”However, the overall sense is that sales are being hard won and groups can expect 2010 to be every bit as tough as 2009. This May’s result compares with a 0.6% increase in like-for-likes in May last year,” he added.

Month-on-month, May’s sales were down -18.2% against April, which had the benefit of Easter.

Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, said: “Pub restaurant growth has been sluggish all year, but the May number is less alarming than it appears since it does not include the half term week this year, which we believe saw strong trading.”

Mark Sheehan, managing director of Coffer Corporate Leisure, part of the Coffer Group, said: “These numbers demonstrate that the sector overall is finding trade tough. With multiples still taking trade from independents, overall business will be further down than these numbers show. The summer weather and World Cup fever has much to deliver especially to bar operators.”

Richard Hathaway
, head of Travel, Leisure and Tourism at KPMG said: "It is no great surprise that trading conditions have continued to be tough and this year's figures show that overall there has been little change in sales compared with 2009, despite some individual monthly movements.

“Increasing sales is a challenge in such a competitive market, particularly with consumer confidence still fragile. Better collection and greater use of customer data and loyalty schemes, so effective for the retail sector, can however help operators improve further the effectiveness of marketing and drive more sales out of their existing customer base,” Hathaway said..

Jonathan Leinster added: “We are forecasting that consumer expenditure will turn positive this year, but progress will be slow. In that environment, like-for-like growth in pub- restaurants whose brands are strong enough to resist promotions and offer their customers everyday value, are likely to take share.”

Peter Martin concluded: “We repeat our view that It is going to be a long haul and staying largely in-line with last year is probably no disgrace, as at least the leading groups are continuing to out-perform the eating-out market as a whole.”

Coffer Peach Business Tracker is powered by Demographix