London restaurant sales slow compared to rest of UK

By Sophie Witts contact

- Last updated on GMT

London restaurant sales fall behind rest of UK

Related tags: Latest coffer peach, Eating

Sales in London restaurants slowed compared to the rest of the country in September, according to the latest Coffer Peach Business Tracker.

The study, which tracks the performance of 38 companies including Honest Burger, Wagamama and Byron, warned that the capital was ‘feeling the pinch’ as consumers reduced spending on eating out.

Like-for-like sales in London fell 3.2% compared to September 2016, while restaurants outside the M25 saw growth of 0.2%.

The same trend was reported in August,​ ​with managed restaurants, pubs and bars in London seeing a 1.6% decline in sales.

“There’s no getting away from the fact that September has been a fairly dismal month for casual dining operators, especially in the capital,” says Paul Newman, head of leisure and hospitality at RSM, which produces the Tracker in partnership with Coffer Group.

“These sales numbers continue to be underpinned by the growing influence of food delivery and fierce discounting between brands. Operators will hope that a focus on premiumisation over the festive period will help to claw back some of this lost margin.”

Supply outweighing demand

Total sales across all restaurant companies in the Tracker rose 3.3% in September, boosted by new openings, thought like-for-likes were down 0.7% overall.

However, ongoing brand expansion is expected to slow as the supply of restaurants begins to outstrip demand.

According to MCA's UK Market Restaurant​ report the sector is expected to reach a value of £20bn in 2017, but growth will be followed by a period of 'market correction' with a slowdown in expansion ahead.

CGA’s latest Business Confidence Survey, published this month, showed that while 66% of bosses in the sector were optimistic about prospects for their own company, only a third (34%) were upbeat about prospects for the market as a whole, down from 43% in May.

Consumers are still going out to eat and drink, but sales are ‘sluggish and hard won’, says Peter Martin, vice president of CGA.

Related topics: Trends & Reports

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