October sees "little or no growth" in the eating and drinking-out market

20 November 2017 by
October sees "little or no growth" in the eating and drinking-out market

Trading across pub, bar and restaurant groups was flat in October with like-for-like sales up just 0.3% on October 2016.

That is according to the latest figures from the Coffer Peach business tracker, produced by business consultancy CGA in partnership with leisure property advisory Coffer Group and business advisory firm RSM.

Businesses outside the M25 generally did better, with collective like-for-likes up 0.4% against only a 0.1% increase for operations inside London. Pubs and bars fared better than restaurants, with like-for-like sales up 1.4% against October last year, while restaurant groups saw a collective 1.5% sales decline nationally.

Restaurants in London were worst hit, suffering a 2.1% fall in same store sales during the month, coming on the back of a 3.2% decline in September.

Peter Martin, vice-president of CGA, said: "October's flat trading was at least better than the 0.9% decline the market experienced in September. The truth is that we are seeing little or no growth in the eating and drinking out market.

He added: "This won't help business confidence in the sector, however. With inflation running at 3%, sales are effectively going backwards, and with cost pressures in the industry, around food inflation and people in particular, still rising, times are tough for operators."

Total sales growth in October among the 38 companies in the tracker cohort was 4%, compared with the same month last year, reflecting the continuing, if much more subdued, effect of new openings, which have slowed significantly over the past year.

Underlying like-for-like growth for the sector, for the 12 months to the end of October, was running at 1.3%, with total sales growth over the 12 months steady at 4.1%.

Mark Sheehan, managing director of Coffer Corporate Leisure, said: "Sales in the drinking-out market showed signs of stability last month, while restaurant sales were under continued pressure. The restaurant market in particular is highly competitive and especially in London. With costs increasing for many it is a case of 'battening down the hatches'."

Paul Newman, head of leisure and hospitality at RSM, added: "It's a second month of poor like-for-like sales for the sector, with casual dining groups being particularly hit. Consumers are continuing to choose to spend on 'big ticket' experiences such as holidays and sporting/entertainment events as their budgets get squeezed further. Operators will be desperate to see a reversal of this trend throughout the all-important festive trading season. For some, it could be the difference between survival or failure as we move into the New Year."

Hospitality stays steady amid record drop in consumer spending >>

Spending on pubs and restaurants stays strong despite faltering consumer confidence >>

Discounting blamed for hospitality's productivity drop >>

Tough September trading hits restaurants, pubs and bars >>

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