Eating and drinking out market seeing little or no growth- CGA

20/11/2017 - 10:13
The vice president of business insight consultancy CGA has said that sales in the eating out market "are going backwards" after the company’s Coffer Peach Business Tracker revealed another "poor" month of trading across the sector.

CGA’s Peter Martin called the current climate ‘tough’ on operators, with confidence “low”, as the tracker showed flat sales in October for the UK’s restaurants, pubs and bars.

The monthly report showed London’s restaurants were the worst hit, with like-for-like sales suffering a 2.1% fall on October 2016, although this was slightly better than September’s 3.2% decline.

Restaurant sales across the country saw a collective decline of 1.5%.

Like-for-like sales across the nation’s pubs, restaurants and bars improved upon last month’s showing with a 0.3% increase on last year, compared to September’s 0.9% fall.

A 1.4% rise in pub and bar sales helped offset the performance of restaurants.

Businesses outside of London did better than their capital counterparts with collective like-for-likes up 0.4% against only a 0.1% increase for London operations.

"October’s flat trading was at least better than the 0.9% decline the market experienced in September, and is more in line with the trend we have seen across the summer. The truth is that we are seeing little or no growth in the eating and drinking out market," said Martin.

"This is not to say people have stopped going out – they haven’t. Eating and drinking out is still what the British public like to do, but they are not spending any more or going out any more often. But with more choice of where to go than ever before they are becoming more choosy and trying new places.

“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 up 4.0%, compared to the same month last year, reflecting the “subdued” effect of new openings, which Martin says 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 at 4.1%.

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.”

The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 38 operating groups

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