These are the findings of the latest Coffer Peach Business Tracker, which collects sales figures directly from 24 leading companies every month. The Tracker also reveals that, while drink-led businesses thrived in June, restaurants struggled, with casual dining brands having a particularly tough month.
“While drink-led pubs saw a healthy jump in like-for-likes, casual restaurant chains suffered a corresponding fall against June last year,” explained Peter Martin of Peach Factory, which produces the sector Tracker in partnership with Coffer Group and UBS.
“Competition inside the M25 is also fiercer than elsewhere in the country, and the distractions of football on TV, in particular, just added to that,”
Monthly sales performance for past 12 months
Much of the increased competition in London is coming from the larger chains, which is reflected by the fact that total sales (including the effects of new openings) were up 5 per cent on the same period last year, and were positive across all parts of the market. Overall, chains actually saw more growth in June outside of London than inside.
“The eating and drinking-out market has been volatile like the weather, although the overall picture is of a steadily expanding branded sector,” added Martin. “this is driven by new openings, but with like-for-like growth essentially flat .
“Tracker data shows the annualised like-for-like sales growth rate for the leading groups is currently running at around 1.5 per cent, with total sales running at around 5.6 per cent.”
Looking forward
“While the weak euro is currently affecting tourist trade in London, the Olympics will be the greatest ever advertisement for London and the UK and we expect to see significant long term benefits for the whole sector especially in areas that traditionally benefit from tourism.” Mark Sheehan, managing director at Coffer Corporate Leisure,said: “We are seeing a change in the pattern of trade in the hospitality sector. Pubs are outperforming restaurants and the provinces are trading better than London.
Jonathan Leinster, head of UBS European leisure research,added: “It is far from clear that these trends are anything more than one-off, though a move towards value does appear to have helped pub-restaurants at the expense of the casual dining restaurants.
“Looking forward, the dominant impact in July will be whether the Olympics has a significant impact, which remains an unknown.”
Participants on the monthly Coffer Peach Business Tracker 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), Tragus (Caf Rouge, Bella Italia, Strada), Stonegate (Slug & Lettuce, Yates’), Spirit Group (Chef & Brewer, Fayre & Square), TGI Fridays, Orchid Pub Co, Marston’s, Wagamama, Las Iguanas, YO! Sushi, Novus (Tiger Tiger), Young’s, Amber Taverns, Hall & Woodhouse and Fuller’s.
Prime example
The results of the Coffer Peach Business Tracker are reflected in today's release of Fuller's financial results; the pub group has blamed the wet weather for a drop of 1.1 per cent in like-for-like sales for the 15 weeks from 1 April to 14 July, while the Queen's Diamond Jubilee and Euro 2012 gave the company a welcome boost, with overall sales up 8 per cent.