Pub trade sales growth slows

November was a trickier trading month for Britain’s leading pub, bar and casual dining chains, according to latest Coffer Peach Business Tracker figures.

Combined like-for-like sales grew just 0.4%, compared to the same month last year - the slowest growth rate since May.

Total sales, which include new openings, were up 1.7%, but month-on-month sales were 5.5% down on October. Nevertheless, November was the sixth consecutive month of positive same-store sales in the eating and drinking out-of-home market, when compared to 2009.

The Coffer Peach Business Tracker figures are produced on a monthly basis by Peach Factory in partnership with KPMG, UBS and the Coffer Group. It monitors sales performance across 17 major pub and restaurant operators, including Mitchells & Butlers, Whitbread, Pizza Hut, Punch Pub Co, Gondola and Tragus.

The November result follows a good summer and early autumn for the chains. Tracker figures showed like-for-likes ahead +2.2% in October, +1.0% in September, +1.5% in August, +1.9% in July and +1.4% in June, against the same months in 2009. Last year, November saw a +1.3% like-for-like increase on 2008 levels.

“Of course, November’s figures weren’t affected by the current severe snow and ice,” said Peach Factory’s Peter Martin. “That will undoubtedly impact adversely on December’s figures. We would expect at least low double-digit falls in like-for-likes for the first two weeks of the month. On a cheerier note, Christmas is so far looking good for the market.”

“These numbers demonstrate tough trading as we head towards the key Christmas period,” observed Mark Sheehan, managing director of Coffer Corporate Leisure, part of the Coffer Group, emphasising that this is still far from a benign market.

Richard Hathaway, head of Travel, Leisure and Tourism at KPMG added: "While the leading operators have managed another month of lfl growth, the outlook for the sector remains relatively challenging. Weather disruption this month, the VAT increase in January and the prospect of subdued consumer confidence in 2011 will all make trading tough, particularly outside of central London. It is likely therefore to be only those operators and brands that can beat the market that will see meaningful growth for a while."

Jonathan Leinster, head of European leisure and tobacco research, at UBS Investment Bank, said the 0.4% lfl growth rate in like-for-like sales was disappointing, given that only the final Sunday in November was affected by snow and that the same month a year ago provided an easier comparison than recent months.

“We believe sales growth in recent months has been a combination of footfall and price rises taken ahead of the January VAT rise. Many operators experienced very poor trading during the snowy weeks early in the and so we are concerned that December trading will also prove to be disappointing, and we believe that Christmas falling on a Saturday is not as constructive for pub and restaurant trading as when it falls on a weekday.”

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