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Morning Briefing for pub, restaurant and food wervice operators

Fri 28th Apr 2017 - Easter like-for-likes down 3.8%, restaurants see 9.1% drop
Easter like-for-likes down 3.8%, restaurants see 9.1% drop: It was an Easter break to forget for Britain’s managed pub and restaurant groups, with collective like-for-like sales down 3.8% on 2016’s four-day holiday weekend, according to the latest Coffer Peach Business Tracker. While managed pubs experienced only a 1% fall in like-for-like sales, restaurant operators in the Tracker cohort suffered a steep 9.1% drop in like-for-like performance over the extended weekend period, including Good Friday and Easter Monday, compared with last year’s holiday weekend. “It was not a good time for eating out, as within the pub figures food-led businesses were down more than their drink-led competitors, which actually saw a slight increase in trade,” said Peter Martin, vice-president of CGA Peach, the business insight consultancy that produces the Tracker in partnership with Coffer Group and RSM. “The weather will have played its part in the comparatively poor performance in restaurants but Easter falling late this year in April, rather than in March last year, will have been a factor too. However, there will be concern that the overall decline is not a sign of a tightening in consumer spending. Easter last year was wet and this year the weather was much better, so that would have favoured pubs over restaurants – the reverse was true last year. A late Easter also meant some school holidays fell before the bank holiday weekend, meaning some children will have gone back to school on Tuesday. This may have curtailed the urge for families to go out. There are a number of factors at work here and it has to be noted like-for-like trading in March was only down 0.5% on 2016’s numbers, even without the impact of Easter, which is usually a busy time for the sector. Operators will hope overall April sales will hold up, even with a disappointing Easter, and that trading will even itself up over the two-month period. We will know in a few weeks. However, there will be nervousness about consumer sentiment, with cost pressures hitting businesses and customers alike. We expect overall trading to remain fairly flat for the foreseeable future.” Last month, Coffer Peach reported an underlying annual sales trend for managed pubs and restaurants showed sector like-for-likes running at just 0.8% ahead for the 12 months to the end of March. Trevor Watson, executive director, valuations, at Davis Coffer Lyons, said: “Easter statistics are prone to variations around weather and time of year. Nevertheless, these figures indicate the UK consumer is starting to take a more cautious approach towards eating and drinking away from home. The pub sector is now seeing the benefit of being leaner than it has for some years, which contrasts with the restaurant sector.” Paul Newman, head of leisure and hospitality at RSM, added: “These latest figures highlight the tougher consumer environment for the eating and drinking-out sector. Since June, we’ve seen a significant drop in consumer confidence and this year’s Easter spending will have been impacted by the squeeze on household budgets due to rising inflation and relatively static wages. April’s results will give a clearer indication if the later arrival of Easter and the weather over the period impacted the figures significantly or if they are more representative of an accelerated slowdown. In the meantime, the government’s business rate relief fund is now available, which will offer welcome light relief to some operators.”


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