Value deals help pub chains stay ahead

Leading pub and restaurant chains are trading positively thanks to an increased spend on marketing and promotions.

The Coffer Peach Business Tracker, which surveys trade across 13 chains including JD Wetherspoon, Mitchells & Butlers and Punch Pub Company (Spirit), saw like-for-likes up 1% in July compared to last year.

Like-for-likes also grew 0.6% in May and 0.4% in June on last year. "The July results also confirm the continuing trend for bigger players to outperform independent operators and to gain market share, with total sales up 4.6% against 2008", said Peter Martin, founder of the Peach Factory consultancy.

"Their focus on improved marketing, promotions and delivering value is having an undoubted impact on the top-line.

"Although this will be putting pressure on margins, this is may well be the future for the market and operators will have to get used to working in a lower-margin environment for the long-term."

July also saw a 5.9% increase in month-on-month sales against June but this is a "normal" trend.

Will Hawkley of KPMG, said: ??"The results confirm that trading at the leading restaurant and pub groups is holding up well during the downturn. However operators will have to keep their focus on cash flow and driving down costs whilst continuing to generate innovative promotional campaigns.

"We will have to wait and see what effect rising unemployment and an increase in swine flu rates has on the sector as we approach the winter months."

Companies participating in Peach Business Tracker include Mitchells & Butlers, JD Wetherspoon, Whitbread Restaurants (including Beefeater, Brewers Fayre and Table Table), Punch Pub Company (Spirit Group), Gondola (owner of Pizza Express, Zizzi and ASK), Bay Restaurants (operator of Slug & Lettuce, La Tasca and Ha! Ha!), Town & City Pubs (owner of Yates's), Tragus Group (operator of Bella Italia, Strada and Café Rouge), Barracuda Group (including Smith & Jones and Varsity), Wagamama and Carluccio's.