Leading UK pub and restaurant operators report like-for-like sales uplift in August

Sectors saw the bounce back from last year’s August riots, brighter weather for much of the month and the impact of the Olympics.
Total sales across the 25 companies in the tracker were up overall by 6.2% on last August, including a 10.5% increase inside the M25 and a 4.6% gain outside, which reflected the increasing market-share that major chains are continuing to win.
The research found that London pubs seemed to benefit most from the August uplift, with like-for-like growth approaching 7%. While casual dining chains in London may have been up only 2.8% against last August, it at least reversed a recent trend of falling like-for-likes inside the M25, where restaurant groups have been generally struggling against increasingly intense and diverse competition.

The report said that fauging whether there was an overall Olympic bonus in the Capital, or how big it was, is clouded by the riots effect. However, it said it was fair to say that the rest of the country did not receive a Games dividend, with overall sales only marginally up on last year, despite the better weather.

The year-on-year like-for-like rate is currently running at around 2%.
Mark Sheehan, managing director of Coffer Corporate Leisure, said: “The incredible worldwide coverage for London and the UK this summer is the real story. Some operators in the UK have suffered badly, but the long-term benefit to the hospitality sector nationally will be immense. London will be top of the must visit list for many millions of people and the positive spirit within the UK may well help to get people spending again which will take us out of recession. In total these like for likes are surprisingly positive given the television coverage of the Games this summer and the mass exodus after the Olympics.

Ali Aneizi, M&A and private equity partner at Baker Tilly, said: “It’s been a choppy few months in the build-up to the Olympics, with LFLs up in June, then down in July and uncertainty over how trading was going to unfold in August. The speculation is now over, we’ve had a bounce back and a clear reversal of July’s negative trend. What’s not clear is how much of this reversal is due to an adrenaline shot from the Olympics and how much is due to last August’s riots. The consensus is that it’s probably a bit of both. It remains to be seen whether operators can translate the so-called feel good factor and the hoped for increase in visitor numbers into longer lasting sustainable growth.”

Jonathan Leinster, head of UBS European Leisure Research, said: “Sales growth saw a significant bias towards inside the M25, though to some degree this is a reversion to the ‘norm’, as the Euro 2012 tournament appeared to cause a very strong but temporary increase in LFL sales outside the M25 during June. The last several months have seen a trend of pub-restaurants outperforming casual dining chains. Whether it is because the series of sports events has led to increased social drinking, an improved ‘value’ offering from the pubs or whether it is due to more intense competition amongst the casual dining brands is not clear. However it is likely that sporting events have at least had some impact over June to August.”