May’s like-for-like sales up 8.8%

The latest Coffer CGA Business Tracker from CGA by NIQ in partnership with The Coffer Group and RM UK showed and eighth consecutive month of year-on-year sales in May for managed pub, restaurant and bar groups.

Trading at restaurants was more muted than at pubs with sales up by 2.7% while bars recorded a 6.6% fall in sales.

CGA hospitality operators and food director EMEA Karl Chessell said: “Managed hospitality groups continue to be challenged by soaring costs, the squeeze on consumer spending and rail travel disruption, making inflation-adjusted growth tough.

“Nevertheless, eight positive months in a row have shown demand for eating and drinking out remains strong, especially around holidays and big national occasions.

“As inflation falls and discretionary spending stabilises, we can be cautiously optimistic about a return to real-terms growth in the second half of 2023.”

Increased competition

Pubs, bars and restaurants continue to see sales growth lagging inflation, according to Coffer Corporate Leisure managing director Mark Sheehan.

He added: “There is increased competitive from a wide range of new offers including experiential concepts and food markets, which are competing with more conventional offerings.

“The sector is hoping the warmer weather in June can help kickstart a real recovery in numbers.”

While the figures reflected growth for the managed groups, last month’s trading was dampened in many areas by rail strikes and fragile consumer confidence has continued to affect visit frequency while high inflation means sales stayed below the levels of May last year in real terms.

“Pub operators were the undoubted winners of May’s triple bank holiday, capitalising on coronation fever as customer purse strings were loosened by the warmer weather and news of energy price cap reductions,” RSM UK head of leisure and hospitality Paul Newman said.

Peak level inflation

“With food and drink inflation still at peak levels, restaurant operators felt the pinch with growth still in negative territory in real terms.

“The next few months will be telling, particularly in London, which experienced inflation-busting performance in May compared to the rest of the country.

“Now the King’s coronation is behind us, the capital’s long-term recovery is dependent on further momentum from inbound tourism.

“Chinese tourists remain cautious and are staying closer to home for now leaving operators to wonder if the capital’s revival will be sustained during the summer months or whether May was a one-hit wonder.”