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UK on-trade sees 20th month of growth

UK on-trade sales rose again in November, but it was food rather than drink driving this growth, with London considerably more buoyant than the rest of the country.

Data from CGA Peach, a business consultancy partnership between the Coffer Group, Baker Tilly and UBS, which compiles data from 30 major pub and restaurant groups, showed that like-for-like sales in the UK on-trade last month enjoyed 3.4% growth. This marked the 20th consecutive month of such growth for the sector.

However, this performance was skewed considerably by the 6.1% rise in London, which marked a sharp contrast with the more modest 2.4% uplift outside the M25.

There was also a stronger performance for casual dining chains, where sales rose by 4.8%, than the managed pub sector, which achieved a more modest 2.8% growth. Much of this uplift for the pub business came from food – up 4% – rather than drinks, which saw sales grow by 1.5%. According to Peter Martin, vice-president of CGA Peach, “Overall, food sales account for an average 45% of revenue in managed pub chains.”

Once total sales were factored in, which include the impact of new openings, the UK showed 6.8% growth compared to last November, an increase driven in particular by the ongoing roll-out of casual dining restaurant brands.

Noting that these figures point to “steady growth” in the UK on-trade sector, Trevor Watson, director at Davis Coffer Lyons, offered his prediction for the year ahead.

“Consumer spending power will be sustained in 2015 as a result of falling oil prices, which will help to ensure the casual dining and pub sectors continue on their upward trajectory in terms of sales figures,” he forecast.

In addition, Watson remarked: “The London market continues to be the principal engine of the sector and we do not see any reason for this to change in the immediate future.”

Paul Newman, head of leisure and hospitality at Baker Tilly highlighted the total sales growth of 6.8% as representing “the highest monthly sales increase since April.”

He also flagged up the attractiveness and dynamism of the casual dining sector, noting: “The storming success of the recent Chilango and River Cottage fundraisings and the ensuing ownership battles for larger chains such as ASK/Zizzi and TGI Friday’s are testament to the sector’s attractiveness to small and large investors alike.”

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