Spending stalls as managed pubcos lfl sales fall

By Gary Lloyd contact

- Last updated on GMT

Sector suffering: managed pubs lfl sales have dropped while bars remain flat and restaurants show modest growth (credit: Getty/Charday Penn)
Sector suffering: managed pubs lfl sales have dropped while bars remain flat and restaurants show modest growth (credit: Getty/Charday Penn)

Related tags: Finance, Food, Pubco + head office, Tenanted + leased, Multi-site pub operators

Like-for-like (lfl) sales at Britain’s leading managed pub groups in May fell by 1% versus pre-Covid-19 levels of 2019, the latest Coffer CGA Business Tracker has revealed.

The result from May’s Tracker follows like-for-like growth of between 2% and 4% from February to April in the overall managed pubs, bars and restaurants sector. However, given high levels of inflation since 2019, sales are significantly behind pre-pandemic levels in real terms.

Results showed lfl sales down by 1% at pubs while they were flat at bars and rose 2% at restaurants in May – a combined rise of 0.1% versus 2019.  

Trading in London improved in May, with like-for-like sales flat within the M25 as more workers and tourists returned to the capital. Sales outside the M25, which were well ahead of London for the first four months of the year, were also flat –a sign of a tightening squeeze on consumers’ spending in many regions.

Reliance on deliveries

The Tracker – produced by CGA by NielsenIQ in partnership with The Coffer Group and RSM UK – also highlights operators’ current reliance on delivery for sales growth. Dine-in-only sales across all managed groups were 3% lower than in May 2019, while the CGA & Slerp Hospitality at Home Tracker – based on a different cohort of businesses – has shown that delivery sales have been four times higher than pre-Covid-19 levels in recent months.

Karl Chessell, director – hospitality operators and food, EMEA at CGA, said: “Managed restaurants, pubs and bars have shown impressive resilience since the start of the pandemic, and their appeal remains strong.

“However, rising costs in many areas are clearly tightening the squeeze on both operators’ profit margins and consumers’ discretionary spending. These all highlight that a number of challenges are likely to remain for the rest of 2022.”

Mark Sheehan, managing director at Coffer Corporate Leisure, added: “May like-for-likes were flat, which with rising costs is a negative. June, however, should see a bounce with the Jubilee and warmer weather and operators are optimistic for strong sales across the summer.

“The focus though is on staffing and rising costs. The issues with recruitment remain a critical problem for the hospitality sector.”

Capital shows growth

Paul Newman, head of leisure and hospitality at RSM UK, said: “It’s great to see London coming back to life with sales finally returning to a level not seen since the start of the pandemic, although the ability of operators to take advantage of this increased demand continues to be curtailed by significant staff shortages.

“With inbound travel corridors now fully open and the Jubilee weekend providing a showcase for pageantry in all its glory, operators will hope that these results finally herald the start of a sustained recovery led by international tourists helping to offset subdued domestic demand.”

CGA collected sales figures directly from 65 leading companies for the latest edition of the Coffer CGA Business Tracker.

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