Fri 15th Sep 2017 - Sector sales growth slows in August with like-for-likes up only 0.2% Sector sales growth slows in August with like-for-likes up only 0.2%, London sees 1.6% decline: Britain’s managed pubs and restaurants saw sales growth slow in August with collective like-for-likes up only 0.2% compared with last year, the latest Coffer Peach Business Tracker has revealed. The flat trading highlighted by the tracker is down on the 0.6% increase in like-for-like sales recorded in both June and July. “The wet weather can take some of the blame with restaurant chains, which tend to do better when it’s raining, seeing a collective 1.1% increase for the month against a 0.3% decline among pub and bar groups,” said Peter Martin, vice-president of CGA, the business insight consultancy that produces the tracker in partnership with Coffer Group and RSM. Regionally, London had a particularly poor month with like-for-likes across the capital down 1.6%, while the rest of the country saw a 0.8% increase on August 2016. Martin added: “What will worry operators is this performance is lagging inflation, now edging up towards 3%, by some distance. The underlying like-for-like trend for the 12 months up to the end of August is better, up 1.3% on the previous 12-month period, but that too is behind the inflationary curve. The sector has had to absorb significant cost pressures already this year, particularly around property costs and food inflation – and most operators have passed at least some of that on to consumers through price rises. While those menu increases don’t appear to have hit sales, neither have they provided any noticeable revenue boost. The one positive point is consumers are still going out to eat and drink and, although sales are sluggish and hard-fought for, at least they are not suffering the way other parts of the economy are such as car sales.” Total sales growth in August among the 37 companies in the tracker cohort was 3.5%, reflecting the continuing if more subdued effect of new openings over the year, but down on the 3.7% seen in July. Coffer Corporate Leisure managing director Mark Sheehan said: “These numbers reflect the tough summer many pubs and restaurant businesses have suffered. There is no hiding. These like-for-like figures are well below inflation. For restaurants in particular, they reflect the new openings over an extended period that have taken some trade from established operators. Pubs suffered from poorer weather in August compared with last year.” Paul Newman, head of leisure and hospitality at RSM, added: “Promotional activity has increased significantly in 2017 and yet sales continue to stagnate, putting further pressure on margins. Despite this the appetite of new entrants joining the market remains markedly resilient, with London set for a record 44 restaurant launches this month as reported by Hot Dinners. As consumer spending tightens and cost pressures increase, competition from new independents will simply add to the challenges existing operators face.”