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Pub sales weaken growth in casual dining

Published:  19 May, 2016

According to Coffer Peach Business Tracker, part of CGA Peach, like-for-like sales across managed pub and restaurant groups were down 0.8% for April compared to the same time last year.

The slump seems to be driven by a lack of sales amongst pubs, with LFL sales for pubs declining 2.7% for April compared to LFL trading increase 2.5% for restaurant groups.

Some of the decline in sales is due to poor weather and the slowing of the economy in general leading up to the Brexit vote according to Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker in partnership with Coffer Group, RSM and UBS.

He said: "April's performance can in part be put down to the cold weather, to Easter being in March rather than April this year and also to the general slow-down in the wider economy in the run-up to the Brexit vote. But the underlying fact is that the overall market has been essentially flat since the start of the year, with April's numbers coming on the back zero growth in February and only a small uptick in March."

The weather also explains why restaurant groups may be outperforming compared to pubs as more customers opt to stay indoors.

"The cold weather in the month also helps to explain why restaurants did better than pubs, as poor weather always tends to favour restaurants and good weather pubs," said Martin.

Another contributing factor in the decline is that The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 31 operating groups.  With the rise of smaller chains, pop-ups and some consolidation that is occurring in the market, many of the groups tracked are facing increased competition and eroding market share.

Paul Newman, head of leisure and hospitality at RSM, a tax and consultancy firm, said: "This month's figures again show a disappointing like-for-like trend, particularly outside of London. This slowdown in growth is in part driven by an increasing number of exciting new concepts taking market share from the established, mainstream operators whose results dominate Business Tracker."

London, regionally bucked the trend with like-for-likes sales up 1% against a 1.3% fall outside the M25 and across the rest of Britain.

But despite the uptick in sales in London there does seem to be a slowing trend in on-trade spend.

"The 12-month like-for-like moving average growth rate has slowed and came in at 1.0% in April, compared to March at 1.2%, February 1.1% and January 1.3%," said Jarrod Castle, leisure analyst at UBS Investment Research.