Promotions give restaurants and pub groups January boost

Aggregated sales figures from 11 of the biggest restaurant and pub operators show that in January, like-for-like sales were up 5.6 per cent on those during January 2008, fending off suggestions that diners are opting to eat-in at home with takeaways and supermarket offers.

However, Peter Martin, chief executive of Peach Factory, the company behind the new Peach Business Tracker, said the market had used heavy discounts to attract trade during a traditionally quieter months and operators were still expecting a tough 2009.

He said: "Far from eating-in being the new eating-out, as some retail chains would have us believe, people are continuing to go out, and the major players are working hard to maintain that.

"This month`s figures may be more robust than many had expected, but they suggest that the public continues to want to go out to eat and drink when the experience and offer is right, and that well-run pubs and restaurants provide a welcome respite from the gloom of the down-turn."

"There are clearly a whole number of factors that will have contributed to the monthly upswing against the same time last year. Increased marketing focus by the major players and the range of consumer offers now in the market have had a major impact on tempting the public out-of-home. Eating-out of home has actually become a relatively cheaper alternative to cooking at home. Retail food prices in contrast have risen."

The companies who contributed to the survey, run in conjunction with UBS†and KPMG, were Mitchells & Butlers, JD Wetherspoon, Whitbread Restaurants, Spirit Group, Gondola, Bay Restaurants, Town & City Pubs, Tragus Group, Barracuda Group, Wagamama and Carluccio`s.

Many of those, including Gondola`s Pizza Express and Bay Restaurant`s La Tasca, ran very competitive promotions such as 2-for-1 and 50 per cent off food throughout January, which Richard Hathaway, KPMG`s head of travel, leisure and tourism said would have contributed to a drive in sales `but could ultimately impact profitability.`

"There is also the impact of discounting on brand value to consider, although during such difficult times, survival and generating cash are the priorities. The good news is that consumers currently remain tempted to eat and drink out, only time will tell if this remains the case," he added.