Pub sales fall as weather puts further dampener on consumer spending
Spending on drinking and eating out has turned sluggish, with sales at pubs and bars falling as wetter weather mixed with a fragile consumer mood.
UK pub, bar and restaurant groups saw like-for-like sales rise just 0.2% in August compared to the same month last year, the Coffer Peach Business Tracker survey revealed, which was down from 0.6% growth in the two preceding months.
In London, same-location sales were down 1.6%, while the regions saw a 0.8% year-on-year increase.
Pubs and bars suffered more than restaurants, with sales declining 0.3% compared to a 1.1% increase for restaurants.
The wet weather can take some of the blame, said Peter Martin, vice president of CGA, which produces the tracker, as restaurant chains tend to do better when it’s raining.
“What will worry operators is that this performance is lagging inflation, now edging up towards 3%, by some distance," he said.
"The underlying like-for-like trend for the 12 months up to the end of August is better, up 1.3% of the previous 12 month period, but that too is behind the inflationary curve."
He added: "The sector has had to absorb significant cost pressures already this year, particularly around property costs and food inflation - and most operators have passed at least some of that on to consumers through price rises. While those menu increases don’t appear to have hit sales, neither have they provided any noticeable revenue boost,” he said.
Taking into account new openings, total sales growth slowed to 3.5% from the 3.7% seen in July.
“These numbers reflect the tough summer that many pubs and restaurant businesses have suffered," said Mark Sheehan,
managing director at Coffer Corporate Leisure. "There is no hiding."
As well as staff costs from the national living wage and other sources of inflation, Paul Newman, head of leisure and hospitality at RSM, pointed to a significant increase in promotional activity in 2017 - "and yet sales continue to stagnate, putting further
pressure on margins".
He noted that the appetite of new entrants joining the market has remained resilient, with London set for a record 44 restaurant launches this month, as reported by Hot Dinners.
"As consumer spending tightens and cost pressures increase, competition from new independents will simply add to the challenges being faced by existing operators.”
CGA collects sales figures directly from 37 large leisure chains including Mitchells & Butlers, Pizza Express, Whitbread, The Restaurant Group, Greene King, Marston’s, Fuller’s, Young’s, Byron, All Star Lanes and Le Pain Quotidien.