Like-for-like sales at London's restaurants fell faster than the national average in September, as competition heats up between big operators and delivery services took a bigger slice of the market.
Consumers reined in spending on dining out across the UK, according to CGA's latest Coffer Peach business tracker, which monitors sales at the country's biggest pub and restaurant companies.
Like-for-like sales at restaurants fell 0.7 per cent nationally, compared to a bigger drop of 3.2 per cent at restaurants in the capital.
There was better news for the UK's pubs, with like-for-likes up one per cent.
But overall like-for-like sales were down 0.9 per cent in the eating and drinking out sector, with London weighing on the national average. Outside the M25 the average decline was 0.7 per cent while in the capital this was 1.6 per cent.
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“Rising costs around property, tax, people and raw materials have increased pressure on margins already this year in what is an ever competitive market. Faltering sales will only add to sector concerns,” said Peter Martin, vice president of CGA.
The effect of new openings meant total sales rose 2.6 per cent in September, despite the slip in underlying sales.
“The one positive point is that consumers are still going out to eat and drink, and although sales are sluggish and hard won at least they are not suffering the way other parts of the economy are, such as car sales,” Martin added.
Paul Newman, head of leisure and hospitality at auditor RSM, added: “There’s no getting away from the fact that September has been a fairly dismal month for casual dining operators, especially in the capital. 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.”