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Restaurants continue to struggle as consumers tighten purse strings ahead of Brexit

Published:  11 March, 2019

The restaurant trade suffered another tough month in February with the mini heatwave towards the end of the month failing to move the whole market much, despite an encouraging performance from the pub trade.

Restaurant groups saw a 1.7 decline in like-for-like sales in February compared to the same period last year. In contrast, managed pubs recorded 1.4% growth, according to CGA’s Coffer Peach Business Tracker released today.

Overall, the managed pub and restaurant sector saw a slight 0.3% uplift in like-for-like trading last month, but that was due entirely to strong pub sales, with restaurants moving backwards.

Drink-led pubs were the strongest performers with managed pub market food sales also under pressure - drink sales were up 3.5% against an 0.9% fall in food.

Outperforming the rest of Britain, London saw overall like-for-like sales growth of 1% over the month, compared to just 0.1% outside the M25, with a big difference between the performance of managed pubs and chain restaurants in the capital - pubs up 3% against a more significant 2.2% sales decline for restaurants.

In the rest of the country outside the M25, the difference in performance was less stark, with pubs’ like-for-likes up 0.9% and restaurants down 1.2%.

While there was continued cause for optimism among Britain’s managed pubs, the expected pick up for casual dining resulting from the closure of under-performing sites compared to a year ago had failed to materialise, said RSM, which produces the Tracker in partnership with CGA and the Coffer Group.

“The fact that sales are continuing to fall is a huge challenge for the eating out sector and underlines the fierce competition for discretionary spend on the High Street, as consumers tighten their purse strings in preparation for Brexit,” said head of leisure and hospitality Paul Newman.

Echoing this, Mark Sheehan, managing director of Coffer Corporate Leisure, said “there is no quick fix for the restaurant sector”.

“Oversupply in some areas will mean that we may continue to see negative numbers for the foreseeable future, especially within the M25 where competition is fiercest.”

Total sales across the 51 companies in the Tracker, which include the effect of net new openings coming on stream since this time last year, were ahead 2.7% compared to last January.

Underlying like-for-like growth for the Tracker cohort, which includes both large and small groups, was running at 0.9% for the 12 months to the end of February.