Managed pub chains on the up
The major branded pub chains have now recorded six months of positive like-for-like sales growth, despite predictions that the eating and drinking out market would be one of the hardest hit.
The pub chains, including JD Wetherspoon, Punch Pub Company (formerly Spirit Group), and Mitchells & Butlers, recorded a 1.7% increase in like-for-like sales in September, according to the Coffer peach Business Tracker.
"These latest numbers mark six consecutive months of positive like-for-likes collectively from the 13 major companies that make up the Business Tracker sample," said Peach Factory chief executive Peter Martin.
"In fact, apart from a blip caused by Easter falling in different months in 2009 and 2008, like-for-likes have stayed in positive territory throughout the year so far."
Month-on-month sales fell 9.1% in September against August, "bolstering the theory that September may be coming the new January, particularly for families cutting back on spending post holidays".
Mark Sheehan, managing director of Coffer Corporate Leisure, said: "These numbers show a steadily improving performance overall from the bigger operators. Multiple operators are generally feeling a bit more confident and certainly in the restaurant sector are on the expansion trail again."
Smaller operators
Richard Hathaway, head of Travel, Leisure and Tourism at KPMG, added: "While year on year sales at the UK's large pub and restaurant groups continue to hold their own, the fall in monthly sales in September is a sobering reminder that autumn is traditionally a tougher period and is likely to be even more so this year.
"It is tougher out there for the smaller operators, scale and brand recognition seems to be a key element of survival in these straightened times, as consumers seek out the best experience for the best price.
"There is a ray of light as the festive period approaches, but for some the challenge will be getting there. We may well see further discounting in the sector in an attempt to maintain customer footfall."
Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, added: "The managed pub companies have reported strong (1% to 4%) LFL sales since June, but much of this sales growth has been achieved through increased promotional activity.
"Looking into January 2010, we expect consumer expenditure to improve modestly and input cost pressures to begin to diminish, however we are concerned about the effect on margins during the first quarter as the VAT rise will occur during a seasonally weak period."
Companies participating in Peach Business Tracker include Mitchells & Butlers, JD Wetherspoon, Whitbread Restaurants (including Beefeater, Brewers Fayre and Table Table), Punch Pub Company (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.
