Hospitality groups' like-for-like sales up in June – but inflation bites

June's like-for-like sales at Britain's managed restaurant, pub and bar groups were 5% ahead of June 2019 levels, representing the strongest month of like-for-like growth since the start of 2022.

However, the figures were skewed by the Queen's Platinum Jubilee, which provided two Bank Holidays against none in June 2019, and the growth was also below inflation as measured by the Consumer Price Index, which recently topped 9%.

That's according to the latest Coffer CGA Business Tracker, produced by CGA by NielsenIQ in partnership with the Coffer Group and RSM UK.

Restaurants were the strongest performing of the Tracker's three hospitality segments in June, with like-for-like growth of 8%. Pubs' sales were up by 3% on three years ago, and bars' sales rose by 5%.

Trading in London remained challenging. After a flat performance in May, like-for-like sales within the M25 were down by 1% in June, compared to 7% growth beyond the M25. And rail strikes over several days in June significantly reduced footfall from workers and visitors in London.

The Tracker also suggested that some consumers who opted for deliveries since the start of the pandemic were returning to eating out. Managed groups' dine-in only sales were up by 2% on a like-for-like basis in June – the first time this year that they have been in line with total growth.

Karl Chessell, director – hospitality operators and food, EMEA at CGA, said: "Like-for-like sales growth of 5% would represent a strong performance for managed groups in most months. However, high inflation means sales are down in real terms, and mounting costs continue to pile pressure on profit margins. The first half of 2022 has brought some welcome stability to the hospitality sector, and consumers have returned to most of their pre-pandemic habits—but while the long-term outlook remains good, there may be some tough months ahead for many businesses."

Mark Sheehan, managing director at Coffer Corporate Leisure, said: "We are seeing a very slow return to normality. Recently publicly announced results show Loungers at 17.9% like-for-likes on 2019 and Wetherspoons at 0.5% for example. Some operators and locations are trading well. Inflation and recruitment remains a priority."

Paul Newman, head of leisure and hospitality at RSM UK, said: "With the late May bank holiday falling into June this year and the additional day for the Jubilee, operators saw a welcome boost to sales for the month. But even the Queen's gift to the nation won't reverse the wider economic challenges facing the sector. Stripping out the bumper bank holiday, and with sales growth tracking behind inflation, the underlying trend is still one of squeezed margins and flat sales."

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