Like-for-like sales up 5% in June
The result from the tracker – produced by CGA by NielsenIQ with the Coffer Group and RSM UK – represented the strongest month of like-for-like growth since the start of 2022.
However, June’s figures are skewed by the Queen’s Platinum Jubilee, which provided two bank holidays against none in June 2019. The growth is also below inflation as measured by the Consumer Price Index, which recently topped 9%.
Pubs’ sales were up on 3% on three years ago, and bars’ sales rose by 5%. However, they were superseded by restaurants which saw like-for-like growth of 8%.
Despite this, trading in London remains challenging, the data revealed. After a flat performance in May, like-for-like sales within the M25 were down by 1% in June, compared to 7% growth beyond the M25. This follows rail strikes over several days in June, which significantly reduced footfall from workers and visitors in London.
The tracker also suggests some customers who have opted for deliveries since the start of the pandemic are now returning to eat out.
Mounting costs add pressure
Managed groups’ dine-in only sales were up by 2% on a like-for-like basis in June – the first time this year they have been in line with total growth.
CGA EMEA hospitality operators and food director Karl Chessell said like-for-like sales growth of 5% would represent a strong performance for managed groups in most months.
However, he continued, high inflation means sales are down in real terms, and mounting costs continue to pile pressure on profit margins.
“The first half of 2022 has brought some welcome stability to the hospitality sector, and consumers have returned to most of their pre-pandemic habits—but while the long-term outlook remains good, there may be some tough months ahead for many businesses,” added Chessell.
CGA collected sales figures directly from 62 leading companies for the latest edition of the tracker. Among these were Amber Taverns, Peach Pubs, Star Pubs & Bars and Laine Pub Company.
The sector was seeing a “very slow return to normality”, according to Coffer Corporate Leisure managing director Mark Sheehan.
Welcome boost
He said: “Recently publicly announced results show Loungers at 17.9% like-for-likes on 2019 and Wetherspoons at 0.5% for example. Some operators and locations are trading well. Inflation and recruitment remains a priority.”
RSM UK head of leisure and hospitality Paul Newman said operators saw a welcome boost to sales for the month, with the late May bank holiday falling into June plus the extra day for the Jubilee. However, he believed even the Queen’s big weekend wouldn’t reverse the wider economic challenges facing the sector.
Newman continued: “Stripping out the bumper bank holiday, and with sales growth tracking behind inflation, the underlying trend is still one of squeezed margins and flat sales.
“A new Prime Minister could be just the silver lining operators have been waiting for, with a change in tone at the top of Government potentially bringing about meaningful reforms to the way businesses are taxed.
“An improved business rates system would be an obvious way for new leadership to bring back the UK’s thriving high streets and encourage consumer spending.”
