Restaurant and pub groups report ‘tougher year’ than last

By Emma Eversham contact

- Last updated on GMT

Sales growth is expected to slow this year in the restaurant and pub sectors as confidence waivers among consumers and operators ahead of the EU referendum
Sales growth is expected to slow this year in the restaurant and pub sectors as confidence waivers among consumers and operators ahead of the EU referendum

Related tags: Coffer peach business, London, Eu

A number of restaurant and pub groups believe that 2016 is going to be a tougher year than 2015 as they deal with a slowdown in sales growth and uncertainty around the forthcoming EU referendum.

The latest figures from the Coffer Peach Business Tracker, which monitors sales across 32 pub and restaurant groups, show that like-for-like sales for March were up 0.6 per cent on the same month last year and follow zero growth in February. 

“It’s a generally flat market out there, and the March numbers will be particularly disappointing as they include Easter weekend trading, which fell in April last year. Although the weather over the four-day holiday depressed sales overall, Easter still normally provides a boost to the eating and drinking-out market, no matter how poor the weather,” said Peter Martin, vice president of CGA Peach. 

The forthcoming EU referendum on 23 June is also said to be behind a decrease in the number of new site openings with investment decisions also being postponed until the outcome is known. 

“Sentiment in the market is that 2016 will be a tougher year than last. Optimism levels are still positive, but down on this time last year, and we are already seeing a cutback in site openings among a number of operators,” said Martin. “It will be interesting to see if confidence among both consumers and operators picks up once the uncertainty surrounding the EU referendum is out of the way.” 

Regional expansion

Although new openings are expected to be scaled back, analysts predict that there will be an increase in the number of openings outside London as operators continue to seek cheaper alternatives outside the capital. 

However, David Coffer, chairman of the Coffer Group. warned that the trend could be reversed as expansion into regions had led to increased rental values in these areas. 

He said: “The acceleration of many excellent brands into these regions has enhanced customer demand and trade, and this is reflected in the latest figures. In our opinion, this trend will continue as we see a far greater reluctance in the central London core to pay major premiums especially for licensed premises. We feel that there is a strong possibility that more opportunities will become available in all markets across the UK and particularly central London.” 

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