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Pub and restaurants “feeling the pinch” as sales stay flat in July

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Pub and restaurants “feeling the pinch” as sales stay flat in July

The pub and restaurant market remained flat in July with like-for-like sales only growing by 0.6% compared with the same period last year, despite operators putting up prices to mitigate rising costs.

Figures from the Coffer Peach Business Tracker has revealed that the growth rate in Britain’s managed pub and restaurant chains hasn’t changed since last month, when like-for-like sales growth was also 0.6%.

London’s like-for-like growth was up 0.5% in July on last year, however the region fell behind the rest of the country which saw a 0.7% increase.

Restaurant chains edged ahead of pub groups in performance showing a 0.9% like-for-like sales increase over the period, against 0.4% for pub and bar operators.

The good news for operators was that consumers still appeared willing to spend in pubs and restaurants, despite 80% of operators introducing price rises this year to level out rising costs from business rates and food costs.

Peter Martin, vice-president of CGA, the business insight consultancy that produces the tracker , in partnership with Coffer Group and RSM, said: “Despite all the media talk of fragile consumer confidence, it appears that the British are continuing to go out to eat and drink much as they did last year – which is good news. However, the increased cost pressures that operators across the sector are facing this year, mean that margins are being squeezed and businesses are feeling the pinch.”

Total sales growth in July was 3.7%, which reflects the amount of new openings during the year. The underlying annual sales trend shows sector like-for-likes running at 1.6% ahead for the 12 months to the end of July.

Paul Newman, head of leisure and hospitality at RSM said: “These latest figures will be greeted with a degree of relief by operators. Despite household budgets becoming increasingly stretched, consumers continue to indulge in eating and drinking out. We’ve seen businesses who develop exciting and affordable concepts outpacing competitors and attracting investors keen to support ambitious roll out plans.”

The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 37 operating groups including Mitchells & Butlers; Pizza Hut; Whitbread; Pizza Express; and the Restaurant Group.

Pub and restaurant groups return to sales growth in April >>

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