Major pub players see rise in eating out

Consumers are continuing to eat and drink out but the leading pub and restaurant chains are having to work extra hard to get customers through the door.

New figures from Peach Factory business tracker, run in conjunction with KPMG and UBS, shows that aggregated sales across 11 pub and restaurant chains were 5.6% up on January 2008.

An increase in discounted offers and an extended New Year holiday are among the reasons for the boost on last year. However, on a month-by-month basis, January food and drink sales are 12.5% down on December.

"The higher levels of professionalism and investment from the major chains will enable them to compete more successfully than the independent sector in tougher economic times and to gain market share," said Peach Factory chief executive Peter Martin.

"However, there should be a note of caution. These are only one month's figures and the real health of the major eating and drinking-out sector will only become clear when coming months' data is published.

"This early January boost reflects the fact that many people took an extended holiday after New Year into the first week of January. The rest of the month appeared not so buoyant. The first month of the year is also one of the weakest trading periods and even a small increase in real sales can have a big impact on percentage growth.

"Importantly though, the weight of discount offers and marketing activity now characterising the sector were simply not in play this time last year."

Richard Hathaway, head of travel, leisure and tourism at KPMG added: "The figures suggest the eating and drinking out sector is showing resilience in the downturn, but the test will be whether January's sales bounce continues and translates to the bottom line.

"The plethora of promotional activity will have helped drive sales in the sector, but could ultimately impact profitability.

"There is also the impact of discounting on brand value to consider, although during such difficult times, survival and generating cash are the priorities. The good news is that consumers currently remain tempted to eat and drink out, only time will tell if this remains the case."

Companies participating in Peach Business Tracker include Mitchells & Butlers, JD Wetherspoon, Whitbread Restaurants (including Beefeater, Brewers Fayre and Table Table), Spirit Group, Gondola (owner of Pizza Express, Zizzi and ASK), Bay Restaurants (operator of Slug & Lettuce, La Tasca and Ha! Ha!), Town & City Pubs (owner of Yates's), Tragus Group (operator of Bella Italia, Strada and Café Rouge), Barracuda Group (including Smith & Jones and Varsity), Wagamama and Carluccio's.