Peach Report

Leading groups see sales ahead +1.7% in September

19 October, 2009

Peter Martin

Britain’s leading pub and restaurant groups saw a collective +1.7% like-for-like increase in sales in September, according to latest Coffer Peach Business Tracker figures.

It confirms the sure footedness of the bigger operators during the downturn. These latest numbers mark six consecutive months of positive like-for-likes collectively from the 13 major companies that make up the Business Tracker sample. In fact, apart from a blip caused by Easter falling in different months in 2009 and 2008, like-for-likes have stayed in positive territory throughout the year so far.

The Coffer Peach Business Tracker is run by Peach Factory in partnership with KPMG, UBS bank and Coffer Group, and collects and collates sales data from 13 major companies in the sector to provide an aggregated market figure. Operators making up the sample include leading managed pub chains Mitchells & Butlers, Whitbread and Punch Pub Co and leading casual dining restaurant groups Gondola, Pizza Hut and Tragus.

The aggregated results for September 2009 are:
Like-for-like sales change (against same month last year):   +1.7%
Total year-on-year sales change:                                     +5.2%
Monthly sales change (against August, 2009):                      -9.1%

These big, and largely branded, players also continue to grow collective market share at the expense of the competition. Total year-on-year sales for the sample as a whole was +5.2% in September. 

Month-on-month sales fell -9.1% in September against August, bolstering the theory that September may be coming the new January, particularly for families cutting back on spending post holidays.

Mark Sheehan, Managing Director of Coffer Corporate Leisure, part of The Coffer Group, said: “These numbers show a steadily improving performance overall from the bigger operators. Multiple operators are generally feeling a bit more confident and certainly in the restaurant sector are on the expansion trail again.”

Richard Hathaway, head of Travel, Leisure and Tourism at KPMG, added: "While year on year sales at the UK’s large pub and restaurant groups continue to hold their own, the fall in monthly sales in September is a sobering reminder that autumn is traditionally a tougher period and is likely to be even more so this year. We are seeing differing fortunes across the sector, just in the last week Whitbread posted a robust set of results, while others such as Tootsies went in to administration.   

"It is tougher out there for the smaller operators, scale and brand recognition seems to be a key element of survival in these straightened times, as consumers seek out the best experience for the best price. There is a ray of light as the festive period approaches, but for some the challenge will be getting there. We may well see further discounting in the sector in an attempt to maintain customer footfall."

Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, added: “The 1.7% LFL sales increase is an improvement from the c0.5%-1% LFL growth between May and August, and is broadly in line with recent comments from other operators (eg Marston’s +2.7% in the last nine weeks), which have recently revealed resilient LFL sales growth driven mostly by an acceleration in food sales in the last two months.

“Against the contraction in the overall out-of-home eating and drinking market place and despite strong retail competition, this shows that the major branded players are still taking market share. The managed pub companies have reported strong (1% to 4%) LFL sales since June, but much of this sales growth has been achieved through increased promotional activity. Looking into January 2010, we expect consumer expenditure to improve modestly and input cost pressures to begin to diminish, however we are concerned about the effect on margins during the first quarter as the VAT rise will occur during a seasonally weak period.”

Coffer Peach Business Tracker is powered by Demographix