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Mon 20th Nov 2017 - London restaurant like-for-likes down 2.1% in October, City Pub Company float |
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Like-for-likes sales up just 0.3% in October, London restaurants down 2.1%: Trading across Britain’s managed pub, bar and restaurant groups was essentially flat in October with like-for-like sales up just 0.3% on the same month last year, latest figures from the Coffer Peach Business Tracker show. Businesses outside the M25 generally did better, with collective like-for-likes up 0.4% against only a 0.1% increase for operations inside London. Pubs and bars fared better than restaurants, with like-for-like sales up 1.4% against October last year, while restaurant groups saw a collective 1.5% sales decline nationally. Restaurants in London were worst hit, suffering a 2.1% fall in same store sales during the month, coming on the back of a 3.2% decline in September. “October’s flat trading was at least better than the 0.9% decline the market experienced in September, and is more in line with the trend we have seen across the summer. The truth is that we are seeing little or no growth in the eating and drinking out market,” said Peter Martin, vice president of CGA, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM. “This is not to say people have stopped going out – they haven’t. Eating and drinking out is still what the British public like to do, but they are not spending any more or going out any more often. But with more choice of where to go than ever before they are becoming more choosy and trying new places,” added Martin. “This won’t help business confidence in the sector, however. With inflation running at 3%, sales are effectively going backwards, and with cost pressures in the industry, around food inflation and people in particular, still rising, times are tough for operators,” he added. Total sales growth in October among the 38 companies in the Tracker cohort was 4.0%, compared to the same month last year, reflecting the continuing if much more subdued effect of new openings, which have slowed significantly over the past year. Underlying like-for-like growth for the sector, for the 12 months to the end of October, was running at 1.3%, with total sales growth over the 12 months steady at 4.1%. Mark Sheehan, managing director of Coffer Corporate Leisure, said: “Sales in the drinking-out market showed signs of stability last month, while restaurant sales were under continued pressure. The restaurant market in particular is highly competitive and especially in London. Patterns of trade appear to be changing. The very best operators are trading very well and many outlets have queues, but the market is fickle and is a challenge as we approach the crucial trading period. With costs increasing for many it is a case of ‘battening down the hatches’.” Paul Newman, head of leisure and hospitality at RSM, added: “It’s a second month of poor like-for-like sales for the sector, with casual dining groups being particularly hit. Consumers are continuing to choose to spend on ‘big ticket’ experiences such as holidays and sporting/entertainment events as their budgets get squeezed further. Operators will be desperate to see a reversal of this trend throughout the all-important festive trading season. For some, it could be the difference between survival or failure as we move into the New Year.”
City Pub Company to raise £5m more than expected because of strong institutional demand: The City Pub Group, the owner and operator of an estate of 34 premium pubs across Southern England, has announced its proposed admission to trading on AIM and conditional placing of 20,588,236 new and 6,838,787 existing ordinary shares of 50p each at a price of 170 pence per share to raise gross proceeds of approximately £46.6 million. Based on the Placing Price, the market capitalisation of the company will be approximately £96 million on admission. The placing is expected to raise gross primary proceeds of £35 million for the company, which is £5 million more than initially proposed due to strong institutional demand. The company intends to use the net proceeds of the Placing to accelerate its acquisition strategy and expand its high quality estate of pubs. Clive Watson, chairman of The City Pub Group, said: “We are thrilled with the strong response to our IPO which has led to the offer being significantly oversubscribed, and welcome all our new shareholders. The funds raised will help City Pub Group build on its solid growth platform and enable the company to fund and capture the exciting opportunity ahead. City Pub Group has a strong management team with a clear and proven strategy to double the size of its high quality estate in the next three to four years and build long-term value for all stakeholders.”
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