Summer sun and football a mixed blessing for pubs

Last month's half term holidays, international football festivities and sunny weather were a "mixed blessing" for the UK's leading UK pub and restaurant groups, according to new research.

The Coffer Peach Business Tracker, which analyses sales trends across 16 pub and restaurant operators including Mitchells & Butlers, Pizza Hut and Whitbread, found that combined like-for-like sales rose 1.4 per cent in June, versus the same month last year.

Operators had seen like-for-likes slip in May this year, since half term had come in that month last year.

Total revenue, including those from new openings, rose nearly three per cent on June 2009's figures.

While the timing of the half term break helped trading, the World Cup and the weather were a mixed bag for operators, with many pubs benefitting and a number of restaurants suffering.

Peach Factory's Peter Martin said: "Both pubs and restaurants benefited from extra trade during that first school holiday week. But, the subsequent effect of the World Cup later in the month and the continuing sunny weather had a more mixed impact.

"While pubs in general saw an upside, restaurants generally suffered sales drops. Big sporting events and the weather, as ever, are a mixed blessing."

Trevor Watson, a director of Davis Coffer Lyons, part of the Coffer Group which makes up the Business Tracker, said the like-for-like sales growth reflected a "very strong performance form the major multiple operators in the sector".

However Jonathan Leinster, head of European leisure and tobacco research at UBS Investment Bank, said he suspected that most of this month's positive growth occurred because of the inclusion of half term.

"The World Cup favours drinks oriented pubs rather than pub restaurants and in 2006 Mitchells & Butlers noted that it took nearly three months for its restaurant business to return to what it considered to be normal growth following that year's competition," he said.

Leinster argued that ahead of January's VAT hike operators "will engineer their food menus to incorporate price rises.

"That means that like last year, sales growth could appear to be strong in the autumn months. When higher VAT is introduced in January, it is even possible since a rise will be widely expected, that food prices go up again along with drink prices.

"Conversely, if food prices are held in January, an operator could present this as a value proposition for customers," he added.