The latest sales figures in the pub and restaurant trade do not augur well for leisure operators, who may be facing an increasingly difficult trading environment, the Coffer Peach Business Tracker has warned.
October’s like for like sales slipped back 1% compared with October 2015 in restaurant chains and bars, with London pubs feeling the pinch more than most – down 3.3% against a national average of -1.2%.
CGA Peach vice-resident Peter Martin said: “We have had three consecutive months of sales growth in the sector following the EU referendum, but these October figures demonstrate that operators need to remain cautious with plenty of volatility, uncertainty and competition out there in the market.”
Last October sales were buoyed by the Rugby World Cup, which gave London operators a 3.8% hike, while the rest of the country enjoyed a 2.5% lift. This year London saw the biggest fall of 2.5% overall; outside the M25 like for likes were down just 0.5%.
However, RSM, which produces the sales data along with CGA Peach and Coffer Group, warns that last month’s performance may be more than simply the downside to the previous year’s eating and drinking out rugby-fuelled boost.
RSM UK head of leisure and hospitality Paul Newman commented: “October will be viewed as a disappointing month for many, but the longer term trend over the last 12 months is of slightly positive [like for like] growth, which is largely reflective of the low-growth economic environment we are living in. However, a perfect storm of rising inflation, relatively full employment and a potential interest rate hike could result in an increasingly difficult trading environment. Christmas leisure and retail spend results this year will be nervously anticipated as a bellwether of how confident consumers feel about their prospects going in to the new year.”
These comments are in stark contrast to the upbeat message accompanying last month’s tracker, which reflected that those figures showed “the continued resilience of UK customers” and would “no doubt leave operators, investors and landlords breathing a collective sigh of relief”.
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