Groups trading in London did slightly better with like-for-likes up 0.1%, compared to a 0.6% fall outside of the M25.
“May’s numbers will be a disappointment for operators as they come after a 4.4% increase in April, but the truth is we are seeing an essentially flat market,” said Peter Martin, vice president of CGA Peach, the business insight consultancy that produces the Tracker, in partnership with Coffer Group and RSM.
“Eating and drinking out has proved resilient, with the public continuing to go out even through the last downturn. Our BrandTrack consumer surveys show frequency of both eating and drinking out-of-home staying fairly constant over recent years.
“The problem hasn’t been so much consumer confidence but business confidence, with mounting cost pressures on operators from rising wages, business rates and food costs. The latest fall in sterling following the general election result will only add to that,” he said.
“Restaurant chains did marginally better than pub groups in May, with flat like-for-likes compared to a 0.7% decline across managed pubs. Drink-led businesses did better than food-led operations, due mainly to the weather, but overall it’s been sluggish across the board,” Martin added.
Total sales growth in May among the 35 companies in the Tracker cohort was 2.4%, reflecting the continuing if more subdued effect of new openings over the year. The underlying annual sales trend shows sector like-for-likes running at 1.3% ahead for the 12 months to the end of May.
Mark Sheehan, managing director of Coffer Corporate Leisure, said: “Like-for-likes in May were below inflation. Pre-election jitters will likely have weighed on consumer confidence. Worries over the uncertainty created by a hung parliament, a fraught Brexit process and fears surrounding terrorist attacks could deter some consumers, particularly from visiting city centre restaurants, although stay-cations may offset this in some parts of the country. A weak pound will also help. There are continued headwinds in the eating-out market and despite these numbers the pub sector is generally trading stronger.”
Paul Newman, head of leisure and hospitality at RSM, added: “While spending on eating and drinking out continues to be prioritised, the growth in pop-up dining and number of new concepts increases the need for established operators to refresh and innovate their offering just to maintain market share. With inflation continuing to rise and wage growth stagnating, consumers are starting to feel the pinch. We expect these factors to lead to more consolidation in the sector.”
The Coffer Peach Tracker industry sales monitor for the UK pub and restaurant sector collects and analyses monthly performance data from 35 operating groups, and is recognised as the established industry benchmark. CGA Peach is part of CGA Strategy.
CGA Peach collects sales figures directly 35 leading companies. Participants include Mitchells & Butlers (owner of Harvester, Toby, Miller & Carter, All Bar One etc), Pizza Hut, Whitbread (Beefeater, Brewers Fayre, Table Table), Pizza Express, The Restaurant Group (Frankie & Bennys, Chiquitos, Brunning & Price), Spirit Group (Flaming Grill, Fayre & Square), Casual Dining Group (Café Rouge, Bella Italia, La Tasca, Las Iguanas), Stonegate (Slug & Lettuce, Yates’, Walkabout), TGI Fridays, Marston’s, Azzurri Restaurants (Zizzi, ASK), Wagamama, YO! Sushi, Prezzo, Novus (Tiger Tiger), Fuller’s, Carluccio’s, Young’s, Living Ventures, Strada, Amber Taverns, Hall & Woodhouse, Gaucho, Giraffe, Loungers, Byron, New World Trading Co, Peach Pub Co, Le Bistrot Pierre, Laine Pub Co, All Star Lanes, Le Pain Quotidien, Fazenda, Liberation Group and Downing LLP (investment partner of Antic London)