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Casual dining brands continue to take market share

12 November 2014 by
Casual dining brands continue to take market share

The London economy remains the main driver of growth in the eating and drinking out market, according to the latest Coffer Peach Business Tracker data.

Its research reveals that nationally restaurant and pub groups saw collective like-for-like sales grow 2.2% in October against the same month last year. Inside the M25, however, that growth was 4.1%.

"Managed pubs in London had a particularly good month, as they have had for most of the year," said Peter Martin, vice-president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group, Baker Tilly and UBS.

Casual dining chains in the capital also traded strongly. But Martin pointed out that while the London market is getting better same-store growth, the chains, and in particular casual dining brands, are increasingly investing in opening new sites outside the M25.

"That expansion is reflected in the total sales growth across the 29 restaurant, bar and pub companies in the Tracker sample," he said.

"Nationally, total sales were ahead 5.7% on last October, with restaurant group sales up 11% on a year ago outside of London, largely as a result of that extra site capacity."

Martin continued: "Overall, the groups are seeing steady, consistent growth in eating and drinking out, which now stretches back 19 months.

"Looking at the underlying trend, the year-on-year, like-for-like rate is running at 2.9% up on 2013, with London up 3.7%."

Pubs and bars outside of London remain the weakest part of the market, the data show, with like-for-like sales essentially flat in October, much the same as they were in September.

Commenting on the fact new store openings in the corporate casual market are greater outside London, Trevor Watson, director at Davis Coffer Lyons, said: "This is largely because of greater availability of sites and the improved returns available in these areas. The London market is vibrant with rents at record levels, with overseas and independent operators dominating. This is typical for this phase of the cycle.

Trading performance continues to be strong both in the capital and across the country as economic recovery strengthens and the prospects of an imminent interest rate rise recede."

Paul Newman, head of leisure and hospitality at Baker Tilly, added: "As we turn towards the longer, colder evenings, it is the managed pub chains that still appear to be leading the way and we expect to see this run of form continue.

"Innovative fit-outs incorporating comfortable surroundings with a wide selection of craft beers together with a quality food offering is driving this resurgence, particularly within London and larger cities around the UK."

Nationally, the like-for-like sales growth for October was the same as September at 2.2%, compared with 1.3% for August, 2.2% in July and 0.4% in June.

Jarrod Castle, leisure analyst at UBS Investment Research, said: "This is a consistent story and leaves the 12-month moving average growth rate at 2.9%, up from 2.4% September. Once again strongest like-for-like growth was within the M25 and more importantly it is accelerating."

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