Consumer confidence holds firm as restaurant sales grow

20 October 2016 by
Consumer confidence holds firm as restaurant sales grow

Consumer confidence has held firm in the face of the Brexit vote, as September showed the third consecutive month of positive growth in like-for-like sales in the pub, restaurant and casual-dining sector.

That's according to the latest Coffer Peach Business Tracker, which found that collective like-for-like sales were up 1.8% in September against the same month last year.

Branded restaurants performed slightly better than managed pubs, with like-for-likes ahead by 2.2% against a 1.6% increase for the month for pub groups. That reversed a trend in July and August, which saw casual dining slightly down on the previous year.

Nonetheless, pub numbers were still positive, especially given that they are being compared against a period last year when the Rugby World Cup took place.

"It's the third month in a row following the EU referendum that that sector has recorded positive growth, suggesting that consumer confidence remains upbeat following a sluggish start to the year," said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.

"The good weather will have helped trade this September, but the underlying trend for the market as a whole has been upwards right across the summer, so operators can take some heart from the fact that the public doesn't appear to have cut back on going out, despite the continuing longer-term economic uncertainty around Brexit," he added.

"Perhaps the most encouraging news was that the uplift was not just driven by London and tourism. The September figures show a bigger increase outside the M25, where collective like-for-likes were up 2.2% against a 0.9% rise in the capital," he said.

Total sales for the month among the 34 companies that take part in the tracker, including the likes of Mitchells and Butlers, Pizza Hut and the Restaurant Group, were up 5.0% on September 2015, reflecting new site openings over the past 12 months among participants.

"The hospitality sector continues to show growth post Brexit. Like-for-like sales are broadly in line with the recently released inflation numbers. Hospitality is often a bellwether of confidence and these figures show the continued resilience of UK consumers. However, the news this week that inflation has hit the highest levels for two years, plus rising import and fuel costs, could well mean that we start to see a dip in consumer confidence levels and reduced spend on eating-out as cost increases start to get passed on to customers," said Mark Sheehan, managing director of Coffer Corporate Leisure.

"Despite plenty of doom-mongering predictions, the UK eating and drinking out market has remained remarkably resilient post-Brexit vote. Yet another month of like-for-like growth, and 5.0% total sector growth will no doubt leave operators, investors and landlords breathing a collective sigh of relief. While wider retail is suffering, we believe the leisure and hospitality sector will prosper as consumers continue to divert discretionary spending into more regular bar and restaurant experiences given how embedded they have become to the UK social calendar, " added Paul Newman, head of leisure and hospitality at RSM UK.

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