Brexit vote impact fails to curb eating and drinking out
Despite fears from restaurant and pub bosses that uncertainty following the EU referendum would lead to a consumer spend drop, sales in the 33 pub and restaurant groups monitored actually rose 0.3 per cent on July 2015.
In London, sales were up 2.9 per cent, although those outside the M25 dropped by 0.5 per cent.
“Pub groups also did better than restaurant chains, but that was probably more to do with the good weather than anything else,” said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.
“The market will be relieved however that trade has more than held up post-referendum, as confidence among the bosses of pub and restaurant chains took a tumble after the vote."
Pressure on profitability
Mark Sheehan, managing director at Coffer Corporate Leisure, said while tourists would continue to be attracted to London and other tourist areas due to the weaker pound, sales may weaken overall as costs are set to increase, eroding margins and putting pressure on profitability for the sector.
He added: "The pub sector continues to outperform restaurants, where we do expect to see further pressure on sales outside London."
However, Paul Newman, head of leisure and hospitality at RSM, said operators were planning ahead for the changes.
“While warnings of the UK entering into a recessionary period persist, these results suggest this is not something that operators in the eating and drinking out sector are yet experiencing en masse. Indeed, post Brexit many of our clients are now moving ahead to more effectively plan and refine business models with increased certainty," he said.
“The overall environment for deals remains strong. In fact, we completed more corporate finance transactions in July than in any other month so far this year with banks and private equity both continuing to deploy capital. The UK is a genuine world leader in leisure and hospitality and operators have consistently proved themselves to be adaptable, agile and resilient in the face of change."
