Sales stagnates across pub and restaurant sector - survey

British pubs and restaurants saw growth stagnate in October, as the sector wrestled with stiff competition, curtailed spending and rising costs.

According to the Coffer Peach business tracker, which collates sales from 49 managed pub and restaurant groups, like-for-like sales were ahead just 0.2% in October, propped up by stronger sales in London. In the capital, sales grew 2.5% but fell 0.5% away from the city.

Managed pub and bar groups reported underlying sales growth of 0.6% nationally. In London sales were ahead 3.6% but down 0.4% outside of the capital.

Restaurant chains reported a country-wide decline of 0.3%.

“People are still going out to eat and drink, but there is little or no growth in the market,” said Phil Tate, chief executive of consultancy CGA, which produces the tracker.

“Restaurants saw volume sales, measured by covers, down 1.4%, which is worrying, although spend has remained essentially static. But the really big problem for the sector, and restaurant brands in particular, is continuing fierce completion, added to the burden of increasing business costs that are squeezing both margins and profits.”

Total sales, which take new openings into account, were ahead 2.6% year-on-year, while underlying growth for the Tracker cohort – which represents both large and small groups – was 0.7% for the 12 months to October, which Coffer Peach said showed that the “eating and drinking out market remains at best flat”.

The Coffer Peach tracker surveys sales from companies with a combined turnover of £9bn, including FTSE 250 pub group Mitchells & Butlers, Pizza Express, Whitbread and The Restaurant Group.