Monday 19 November 2018 12:03 am

London pub and restaurant sales buck the trend as casual dining chains struggle to stand out

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Pub and restaurant groups in the capital delivered “relatively healthy” like-for-like sales in October, but growth remained flat across the rest of the country.

Overall like-for-like sales grew 2.5 per cent in London, compared with a 0.5 per cent fall outside the capital. Sales in managed pubs and bars were ahead of restaurants, increasing 3.6 per cent in London from last October.

The figures, published in the Coffer Peach Business Tracker, show the continued pressure on the over-crowded restaurant industry. Growing competition and rising business rates meant collective like-for-like sales across the UK were up just 0.2 per cent on last October.

The difficulties are most evident among casual dining restaurants, which have seen a spate of closures in recent months.

Earlier this month Casual Dining Group (CDG), which owns chains such as Cafe Rouge and Bella Italia, called in a restructuring adviser to help cuts costs amid challenging trading conditions.

Moreover, the disparity in sales figures shows the squeeze in the restaurant industry is being felt more acutely outside the capital.

“Restaurants saw volume sales, measured by covers, down 1.4 per cent for the month, which is worrying, although spend has remained essentially static,” said Phil Tate, chief executive of CGA, one of the companies that produces the tracker.

“But the really big problem for the sector, and restaurant brands in particular, is continuing fierce competition, added to the burden of increasing business costs that are squeezing both margins and profits.”

The tracker collects sales figures from 49 operating groups in the UK with a combined turnover of £9bn. Total sales were up by 2.6 per cent compared to October 2017, boosted by new openings over the last year.

“These figures show the challenges faced by the industry,” said Trevor Watson, executive director of valuations at Davis Coffer Lyons.

“Competition is stronger than ever. The pub market remains more resilient because it does not have the same over-capacity issue.”

He added: “The ongoing relative strength of London is borne out by our own views of the London restaurant property market, which remains active.”