UK pubs, bars and restaurants got back to some sort of normality in August registering flat like-for-like sales thanks to the government’s Eat Out to Help Out (EOHO) initiative, according to the latest Coffer Peach business tracker report. This is the best performance since lockdown measures were lifted.
However the whole market was still down 12.2% on last year’s level based on trading from the 85% of group-owned sites that have reopened. Flat like-for-like trading for those businesses that have opened matches the sales volumes seen in August 2019.
BACK TO LIFE
The success of EOHO has been highlighted by a number of firms reporting over the last few weeks. The latest data shows a clear delineation between food-led and drink-led offerings with bars finding it tough, seeing like-for-like sales drop 27.6% and overall revenues down a whopping 37%. Collectively 74% of bars have reopened.
Restaurants on the other hand saw a huge benefit with like-for-like sales up 13.5% compared with last year, but because only 65% of sites have reopened total sales fell 10.9%.
Since the lifting of restrictions, people living in smaller towns and suburbs have been more inclined to get back to normal life while the traditionally busier city centres have seen reluctance among residents to venture out.
This is reflected in the numbers with London struggling overall despite the success of EOHO, seeing like-for-like sales down 13.4% and total sales 28.1% lower than last August. Restaurants did get a boost, showing positive like-for-like sale up 2.6%, but lagged behind the rest of the country.
In contrast, outside the M25 like-for-like sales rose by 3.2% and total sales only fell by 7.9%.
Trevor Watson, executive director of Davis Coffer Lyons commented: ‘The boost due to EOHO is short term; the longer-term trend is the re-distribution in trade towards residential districts and away from commercial city centres and London in particular.’
BACK TO REALITY
With the EOHO now ended and companies having to take tough decisions on furloughed employees by the end of October when the scheme ends, the short-term outlook for hospitality is as unclear as ever.
Despite today’s relatively positive data investors shouldn’t lose sight of the fact that the underlying picture is pretty dismal. At the end of August like-for-like sales for the whole market were down 21% year-on-year with total sales down 31.9%.
However, there will be long-term winners from the pandemic and the shift in consumption away from big cities - like many other shifts in consumption - looks to be a more permanent feature.
