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Restaurant and pub chains see rise in like-for-like sales

24 February 2009 by
Restaurant and pub chains see rise in like-for-like sales

The UK's major pub and restaurant chains saw like-for-like sales rise by 5.6% in January compared to 2008 as they reaped the benefits of widespread discounting, research revealed today.

The figure was aggregated from the sales of 11 groups, including Whitbread, Tragus, Gondola Holdings and Mitchells & Butlers, for the Peach Business Tracker, a new survey from analyst firm Peach Factory, run in conjunction with investment bank UBS and consultancy KPMG.

On a month-on-month basis, January food and drink sales were 12.5% below those of December, traditionally the strongest month of the year.

Peter Martin, chief executive and founder of Peach Factory, said the figures suggest that consumers still want to go out to eat and drink when the experience and offer is right, although he admitted that the numbers were skewed by the sheer level of promotional activity.

Richard Hathaway, head of travel, leisure and tourism at KPMG, warned that this promotional activity will have helped drive sales in the sector, but could ultimately impact profitability.

"There is also the impact of discounting on brand value to consider, although during such difficult times, survival and generating cash are the priorities," he said. "The good news is that consumers currently remain tempted to eat and drink out, only time will tell if this remains the case."

Mark Brumby, leisure analyst at Blue Oar Securities, also sounded a note of caution, pointing out that January taken as a calendar month had five weekends in 2009 compared to four in 2008. This could be worth in the region of 4% to like-for-like sales, he said.

Diners are eating out less, but spending more>>
Food offers keep sales buoyant at M&B>>
JD Wetherspoon cuts meal and drink prices to tempt customers in>>
Restaurants must adapt to survive the downturn>>
UK's eating out market value drops 13%>>

By Daniel Thomas

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