On-trade group sales go into reverse following tougher restrictions

By Lisa Riley

Published: 13 November, 2020

Tougher Covid restrictions have seen bar, restaurant and pub group sales go into reverse in October, according the latest Coffer Peach Business Tracker report released today.

With 83% of group-owned sites open, down from 88% in September, total sales across the whole managed sector were down 33.9% on the same month last year – a clear deterioration from September when sales were 20.3% below 2019 levels and August when they were just 12.2% down.

Moreover, all parts of the market performed worse than in September with like for like sales in those businesses trading down 28.9% compared to October last year, and compared to a 14.7% fall in September.

Unsurprisingly, drink-led pubs and bars were particularly badly hit, and with England now back in full-lockdown, you can “only wonder how may will re-emerge in their current state, how many will have to revamp their trading styles, including switching their emphasis to food”, said Karl Chessell, director of CGA, the business insight consultancy that produces the Tracker, in partnership with The Coffer Group and RSM.

“What’s crystal clear is that even before total lockdown in England, the imposition of Tier 2 and 3 restrictions across large swathes of northern England, as well as the tough restrictions in Scotland and Wales, had a massive negative impact on sales performance,” said Chessell.

Restaurant groups performed the best, helped by the cut in VAT on food and delivery sales, but still saw total sales down 29.6%, and like for likes 19.5% below October 2019. Delivery accounted for 12.3% of sales among restaurant groups over the month, up from 10.4% in September and the pre-lockdown level of 5.9% in February.

With like for like sales down 52.6% and total sales down 56.9%, bar groups had the worst of the month, while drink-led pubs saw total sales down 37.6% and like for likes down 35.3% on October last year. Corresponding figures in September were minus 22.7% and minus 21.1%.

Food-led pubs/restaurants fared a little better, but still performed markedly worse than in September, with total sales down 28.9% and like for likes down 27.8%. Across all managed pubs food sales were down 24.5% with drink sales dropping 37.6% on the same time last year.

Regionally, London continued to struggle with total sales across managed pubs, bars and restaurants inside the M25 down 39.5%, compared to 32.1% in September, and collective like-for-like sales in those sites open down 35%.

Outside the M25 the market saw like for like sales down 26.8% and total sales down 31.9%.

It was “impossible to put a positive gloss on such depressing results” in the last full month of trading prior to England’s second lockdown,” said Paul Newman, head of leisure and hospitality at RSM.

This week’s news about an imminent vaccine was “just the fillip” the sector needed as operators turned their focus to the operational challenges of successfully re-opening their businesses on 3 December for the truncated, but ever more crucial, festive trading period, he added.

Earlier this week, CGA research revealed the tougher trading restrictions had led to almost a third of Britain’s licensed premises shutting their doors in October ahead of England’s second lockdown on 5 November.

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