Boost for April trading, but real-term growth still elusive

Britain’s leading managed restaurant, pub and bar groups achieved like-forlike and year-on-year sales growth of 6.9% in April 2023, according to the latest Coffer CGA Business Tracker.

It is a seventh positive month in a row for the Tracker – produced by CGA by NIQ in partnership with The Coffer Group and RSM UK – and significantly higher than the figure of 1.4% in March. However, growth remains well below the current rate of inflation, and rising costs continue to impact spending and margins.

April trading was boosted by public holidays. Good weather helped draw consumers to pubs, where like-for-like sales were 8.1% ahead of April 2022. Growth in the restaurant sector was at 7.6%, but bars had another difficult month, with sales down 9.1%.

Managed groups continued their strong post-Covid recovery in London, where April sales rose 10.4% year-onyear – just ahead of inflation. Growth beyond the M25 stood at 5.8%.

Karl Chessell, director - hospitality operators and food, EMEA at CGA by NIQ, said: “April’s figures show the resilience and appeal of managed restaurant, pub and bar groups in a very challenging market. It’s pleasing to see the sustained recovery in London, where Covid restrictions took a heavy toll on hospitality. Consumers clearly remain eager to eat and drink out, and we can be optimistic that their spending will increase when household bills start to ease – but with inflation so high, growth in real terms remains elusive.”

Mark Sheehan, managing director at Coffer Corporate Leisure, said: “Eating and drinking out sales continue to lag inflation. Pubs and restaurants are seeing sales growth, much of which is on the back of price rises. There is innovation in the sector and competition remains strong. Inflation can breed inflation. Consumers are not surprised by price rises, but operators need sales to at least keep up with costs and volumes to increase. While numbers continue to improve, we are not yet seeing this.”

CGA collected sales figures from 75 leading companies for the latest edition of the Coffer CGA Business Tracker.

Meanwhile, CGA by NIQ also reported that leading managed restaurant groups saw delivery and takeaway sales drop 1% year-on-year in April, in the latest Hospitality at Home Tracker.

Year-on-year trading has been negative for 17 months in a row, following a boom in 2020 and 2021 as a result of lockdowns. Deliveries and takeaways by value attracted 14% of groups’ total sales in April – sharply down from 24% in April 2022.

However, the Tracker indicates that year-on-year comparisons are easing. April’s 1% decline compares with 6% in February and 3% in March – raising confidence that demand for deliveries and takeaways is starting to stabilise.

Paul Newman, head of leisure and hospitality at RSM UK, said: “A full month without train strikes undoubtedly contributed to central London pubs and restaurants enjoying like-for-like sales growth of over 10% for the first time since the end of the pandemic. Cost pressures might be easing, but they haven’t gone away, and the ability to trade without interruption is crucial if the sector is to take full advantage of rising consumer confidence.”

Year-on-year trading has been partly protected by rising menu prices, while volumes have fallen significantly. Groups’ delivery order volumes in April were 10% below the same month in 2022, while takeaway and click-andcollect orders contracted by 9%. With inflation in double digits, the value of trading is further behind in real terms.

Chessell said: “Seventeen successive year-on-year drops in delivery and takeaway sales partly reflects the steady return of consumers to restaurants. But with our Tracker showing only modest growth in eat-in sales during that time, amid very high inflation, there is no escaping the fact that total sales have been significantly down in real terms.”