Pub chains outperform casual dining despite 'sluggish' growth

Pub chains outperformed casual-dining establishments in June largely thanks to Euro 2016 screenings, according to the latest Coffer Peach Business Tracker.

Pub chains' collective like-for-like value sales were up 2% for the month compared to restaurant groups’ 1.4%, reported the tracker, which is produced by CGA Peach, RSM, UBS and the Coffer Group.

Pubs and restaurants together saw collective like-for-like sales up 1.8% against June 2015, which CGA Peach vice president Peter Martin attributed the later school half-term break, which fell in May last year.

However, Martin added: “The truth is that the eating and drinking-out market remains sluggishly slow with underlying growth of only around 1% year on year.

“The sales growth in June essentially all came in the first week, which enjoyed a double-digit boost. Our weekly figures show that the rest of the month was generally negative, despite football being on TV.”

Eating decline

Sales at wet-led pubs and bars, especially those outside the capital, were up 3.8% on last June, he said. However, that had been generally evened out by a drop-off in eating out.

There was some evidence that wet-led venues had benefited from the national living wage “putting a few more pounds in the pockets of younger, blue-collar workers,” he added.

London faced a tougher June than the rest of the country, with like-for-like sales within the M25 up only 0.1% on June 2015.

Slow growth

Martin said: “Despite some fluctuations from month to month, the market is showing only slow underlying growth reflecting both increased competition and more uncertain economic times.

“The annual trend shows sector like-for-likes were running at just 1.1% up for the 12 months to the end of June, with restaurant chains up 2%, pub groups ahead 0.5% and very little difference between London and the rest of the UK.”

When it came to the matter of Brexit, Martin said July figures would give a clearer picture but early indications suggested little difference either way.

Paul Newman, head of leisure and hospitality at RSM, added: “The ramifications from the Brexit vote may well affect short-term consumer confidence.

“Operators will therefore be hoping that a change in the weather and an influx of holidaymakers from overseas taking advantage of their increased spending power will be enough to drive up demand over the rest of summer.”