The latest figures from the Coffer Peach Business Tracker show that year-on-year same-store trading is still up 2.9 per cent, and May marks 14 consecutive months of like-for-like sales growth for the 28 companies included in the report.
Total sales for May, which include the impact of new openings, were up 2.5 per cent compared to last year.
“The levelling off of growth will be a reminder that recovery is not guaranteed, although the underlying trend for the market remains strongly positive as the public continue to go out to eat and drink. But competition from smaller and newer operators and also other leisure attractions remains fierce,” said Peter Martin of CGA Peach - the business insight consultancy that produces the Tracker in partnership with Coffer Group, Baker Tilly and UBS.
London v. regions
London performed slightly better than the rest of the country, with like-for-likes up 1.1 per cent, but the picture was uneven, with pub sales up 3 per cent (4 per cent for wet-led businesses), while casual dining chains recorded a 1.3 drop in sales.
“Outside the M25, it was the other way around, with pubs suffering and restaurant groups seeing a 1.9 per cent increase in like-for-likes. The big story outside London was that total sales for casual dining chains increased 9.1 per cent on May last year, highlighting the continued roll-out of new branded sites away from London.
“Staying fresh and offering something new remains a big challenge for even the most experienced operator,” Martin pointed out.
Paul Newman, head of leisure and hospitality at Baker Tilly, added: “Signals from the Bank of England that interest rates could rise this year may cause mortgage-indebted Londoners to rethink their spending habits. If this is the case, operators would be wise to continue this trend and prioritise growth away from an increasingly competitive London market.”
Long-term strength
Looking at the long-term trend, year-on-year like-for-like sales were up 2.9 per cent for the 12 months to the end of May, with total sales increasing by 5.4 per cent.
David Coffer, chairman of the Coffer Group, said: “This month’s figures once again show that the leisure market remains robust. Although collective like-for-like sales are only up slightly, they do follow two strong months of growth and it is understandable that the pace of growth will vary from month to month. The strength of the casual dining sector outside the M25 shows that the recovery, which is often considered to be London-centric, is now spreading to other parts of the country and, as we move into the summer, I imagine the regional pubs market will see a change in fortunes.”