Burst bubble? London's managed food-led pubs feel the squeeze

08-May-2013 - Last updated on 09-May-2013 at 13:23 GMT

Food-led managed pubs within the M25 are not performing as well as those outside the capital, according to a new report from CGA Strategy

Managed pubs located within the M25 are failing to perform as strongly as those outside the capital when it comes to food sales, according to a new report released by on-trade consultancy firm CGA Strategy.

Latest research from the firm's Trading Index shows like-for-like (LFL) food sales within food-led managed pubs in London fell by 2.6 per cent in the last year. Meanwhile pubs located outside the M25 enjoyed a growth in food sales of 1.2 per cent.

The decline in performance appears to be restricted to food-led pubs due to a large number of new London venues stealing market share from some of the more established operators.

"We are seeing a massive influx of food-led concepts into the London market, which is squeezing LFL trends in the established food venues," said Scott Elliott from CGA Strategy. "That said, we don’t see this happening in managed bars and wet-led venues where outlets within the M25 take roughly 25 per cent more revenue than in other locations, with more positive LFL’s."

While the London market undoubtedly continues to provide scope for higher revenues, the report may indicate an early sign that the capital's position as the default location for hospitality businesses is beginning to be questioned.

Restaurant magazine recently reported that smaller restaurant operators were being forced to look outside of London in order to get on the property ladder.