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School holiday boost for June pub and restaurant trading

20 July 2016 by
School holiday boost for June pub and restaurant trading

A later half-term holiday increased overall like-for-like sales across the UK's managed pubs and groups by 1.8% last month, according to the CGA Business Tracker.

Pub chains enjoyed a stronger performance, thanks to the televising of the 2016 football tournament, with like-for-like sales up 2% during the month, while restaurant groups were ahead 1.4%. The figures reversed the negative trends of April and May.

However, growth in the eating and drinking out market remains sluggish, with total underlying growth of around 1% year-on-year, with restaurant chains are up 2.0% and pub groups ahead by 0.5%.

Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the tracker in partnership with Coffer Group, RSM and UBS, said: "The later school half-term break, which this year fell in June against May in 2015, was a big factor in the improved performance, having had a corresponding negative impact last month.

"The sales growth in June essentially all came in the first week, which enjoyed a double digit boost. Our weekly figures show that the rest of the month was generally negative, despite football being on TV.

"Pubs did benefit from the football, with drink-led pubs and bars, especially those outside of London, up 3.8% on last June, but that was generally evened out by a drop off in eating out. There is also some evidence that drink-led businesses have benefitted from the National Living Wage putting a few more pounds in the pockets of younger, blue collar workers, although that's not replicated across the market,"

Regionally, London had a tougher month than the rest of Britain, reversing the situation in May. Like-for-like sales inside the M25 were up just 0.1% in June, against more than 2.5% outside.

Total sales for the month among the 33 companies in the tracker cohort, which include Pizza Express, TGI Fridays, Carluccio's, Fuller's and Young's, were up 5.7% on June 2015, reflecting the fact that groups are still opening new sites, especially outside of London.

Martin said it is too early to see any impact from the Brexit vote. "July figures will give a clearer picture, but early indications from our weekly data suggest little difference either way, although that might be down to the weather."

Trevor Watson, executive director valuations at Davis Coffer Lyons, added: "The economic headwinds that were building in the early part of 2016 are likely to be with us for the rest of 2017, fuelled by Brexit economic uncertainty and international terrorism. The change in the value of sterling will help to sustain revenue figures in London, but will lead to increased cost pressures for all operators, some of which will probably be passed on through price increases."

Casual-dining chains hit by record fall in sales in May >>

Pubs lead the decline in the casual eating out market >>

EU referendum uncertainty hits restaurant and pub sales >>

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