The figures showed the eating and drinking out sector is “in a bull market” according to Paul Newman, head of leisure and hospitality at Baker Tilly.
He said the 1.1% year-on-year rise in like-for-like sales across the tracker’s cohort showed the strength of the sector but warned that continued like-for-like growth would be more challenging. He said the winning brands will be those that can balance expansion with menu and brand development.
The tracker showed London outperforming the rest of the country in July, with like-for-like sales up 2.1% compared to 0.8% outside the M25.
Newman said: “The eating and drinking out sector is arguably in a bull market following another month of robust LFL sales. The surge in overall supply will make LFL growth more challenging in the future as new sites reach maturity.
"We expect major branded casual dining chains to continue to take market share from pubs and independents and the winners will be those who can best balance site expansion with innovative menu and brand re-development.”
Peter Martin, vice president of CGA Peach, said: “While the overall eating and drinking out market continues to grow steadily, it is the growth of branded restaurant chains, especially outside of London that is driving the market.
“Restaurant operators in our tracker sample collectively registered like-for-like growth of 4.3% last month – and 4.9% outside of London. In contrast, pubs and bars had an essentially flat month against the same time last year, with food-led pubs, including pub restaurants, collectively seeing a fall in like-for-like sales. It is a trend that we been seeing for some months now.
“Big name casual dining brands have been opening new sites, particularly away from London, and also improving their offerings, giving the public more choice – and the public has been taking advantage of that choice.”
The Tracker numbers show that total sales in July, which include the impact of new openings, were ahead 4.8% across the market as a whole. Within that, restaurant chains contributed a 9.2% total sales increase against July 2014, with a 12.3% increase outside the M25.
Martin said: “Where managed pubs are doing better is in London. Like-for-like sales were up 1.4% in July, with drink-led pubs, aided by better food sales, performing best. Alongside solid casual dining growth in the capital, this helped London to trade better than the rest of Britain in July, with like-for-likes up 2.1% compared to just 0.8% for the rest of the country.
“In a highly competitive market, the public is being given more choice than ever, and appears to be happy to be tempted by the new and different.”
Trevor Watson, director at Davis Coffer Lyons, added: “The impact of the National Living Wage on consumer spending and operating margins is not yet clear; while the impact on costs can be modelled with a degree of certainty, the effect of increased disposable income on spend in restaurants and pubs for those earning the National Living Wage is more difficult to predict at this stage.”
The tracker collects sales data from currently 31 pub, bar and restaurant companies on both a monthly basis.