The latest figures from the monthly Coffer Peach Business Tracker come on the back of a strong Christmas trading period and a 7.2 per cent leap in like-for-like sales in January.
The London market performed best last month, with a like-for-like increase of 1.3 per cent for operators inside the M25. Total sales across the UK, including the impact of new openings, were ahead 2.7 per cent on this time last year.
Good news
But Peter Martin of CGA Peach, which produces the Tracker, said the 27 leading operators that are analysed will not be displeased with the results.
“Again the winter weather was a factor, if a more benign one this last month,” said Martin. “February last year was a relatively good trading month, with like-for-like sales up 3.3 per cent on 2012, wedged as it was between the two snow-hit months of January and March.
“So to record similar figures this year, especially on the back of a bullish January, will still be good news for the sector.”
Year-on-year, like-for-like sales for the combined 27 companies in the Tracker sample were running 2 per cent up for the 12 months to the end of February, with total sales running 4.6 per cent ahead.
Experts’ opinion
- Paul Newman, head of leisure and hospitality, Baker Tilly
After sparkling like-for-likes in January on the back of a strong festive trading period, further growth, however small, is viewed as extremely positive in a month hit by atrocious weather in many parts of the country. With the British Retail Consortium recently reporting that year-on-year sales in the retail sector have fallen 1 per cent in the same trading period, these results offer further evidence that the consumer continues to favour eating and drinking out over shopping.
The robust characteristics the sector is exhibiting align well with the positive M&A and IPO interest we are seeing from a number of corporate operators.
- Trevor Watson, director, Davis Coffer Lyons
The recovery to normalised growth is now complete and we expect sales to further accelerate throughout the UK over the next 12 months. Demand from operators for sites in our core markets is increasingly strong, which is putting upward pressure on rents, premiums and property values.
This, in turn, is leading to unprecedented prices being paid for a wide range of leisure properties – particularly in central London. The ongoing debate about whether an increase in national minimum wage will strengthen the recovery is an interesting one which operators and investors will need to keep a close eye on.
- Jarrod Castle, leisure analyst, UBS Investment Research
While these figures appear disappointing following on from strong like-for-like growth in January, February was not able to benefit from weather effects. Within the M25, pubs and restaurants saw 1.3 per cent like-for-like growth compared to the regions -0.3 per cent like-for-like decline.
This is in line with a longer-term trend of better growth in the capital. However, site growth is higher in the regions given total sales growth reached 2.8 per cent outside London compared to 2.0 per cent within the M25. The 12 months rolling average declined from 1.7 per cent last month to 1.4 per cent in February.
Whilst this is still ahead of the historical average of 1.1 per cent, this is a reversal of the improving trend we have seen since November 2013.
The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 27 operating groups, and is recognised as the established industry benchmark.