Pub sector saw sales boom across the UK in April
Figures from the Coffer Peach Business Tracker show businesses outside of the M25 saw a 4.8% increase in lfl in April. Across the country the figures marked the 13th consecutive month of growth.
Total sales for last month were ahead 7% on last year across the country, with an 8% rise out of London – fuelled by new openings.
Peter Martin, of CGA Peach, said the strong regional performance was “especially pleasing”.
Easter
He added: “The late Easter break helped April’s numbers, as the holiday weekend partly fell in March last year, but the important fact is we are now seeing consistent growth from the sector. March numbers were strong and we are seeing positive trading from both pubs and restaurants and inside and outside of London.
“Looking at the long-term trend, year-on-year like-for-like sales were up 2.9% for the 12 months to the end of April, with total sales running 5.8% ahead. The eating-out and drinking-out market may now be a more reliable barometer of the general health of the economy than retail.”
Jarrod Castle, leisure analyst at UBS Investment Research, also welcomed the upturn in growth outside the capital.
He said: “While regional growth has underperformed London over the last year - growth inside M25 has averaged 3.4% over the last 12 months, whereas outside M25 has seen an average of 2.0% - April saw lfl sales growth of 4.8% outside M25 (up from 3.4% in March) versus 3.2% inside (down from 7.3%). Total sales growth for London and the regions were 4.7% and 8%, respectively, versus 8.1% and 6.6% last month.”
Confidence
Trevor Watson, director at Davis Coffer Lyons, said: “In spite of weaker Easter trading compared to 2013 (due to its timing), April’s statistics are strong with total sales growth well ahead of RPI. This reflects the confidence that we are seeing from operators in property transactions.
“There is, however, a shortage of quality sites, which is driving up rents while also slowing down some operators’ expansion plans. Despite the lack of opportunities, we expect the remainder of 2014 to continue to show buoyant trading.”
Paul Newman, head of leisure and hospitality at Baker Tilly, said: “The excellent start to 2014 continues. Although the UK’s economic outlook remains broadly positive, we see an increasing risk of businesses in the sector pushing operational gearing to the limits in search of growth.
“The impact of an early Bank of England base rate rise on consumer disposable incomes would disproportionally affect those pub and restaurant groups with new sites tied into high levels of current rent with upward only reviews. Operators need to ensure they retain a sensible level of cash flow and bank covenant headroom in case growth begins to slow.”
