LONDON (ShareCast) - (Sharecast News) - Sunnier weather helped herd more people into pubs last month, though the restaurant sector saw sales continue to wilt.
Like for like sales across managed pubs fizzed up 3.5% in May, the Peach Coffer tracker survey revealed on Monday, with drink-led outlets doing best. Meanwhile 'casual dining' restaurants saw LFL sales fall 2.1%.

Total sales, which takes account of new site openings, were up 6.5% for pubs and 1.2% for restaurants.

Overall the survey, which is conducted into outlets owned by 42 companies, including Mitchells & Butlers, Whitbread, The Restaurant Group, Greene King, Marston's, Fuller's, Young's, All Star Lanes and Revolution Bars Group, calculated a 1.4% increase for the wider industry, which was down 1.2% in April.

London enjoyed a slightly better LFL sales gain of 1.6% compared to 1.4% growth for boozers and eateries outside the M25, with the difference between pubs and restaurants mirroring the national picture.

"It's a familiar story," said Peter Martin, vice president of CGA, which produces the tracker in partnership with Coffer Group and RSM. "When the sun shines people head for the pub, or more precisely the pub garden. In contrast, restaurants do better when it's dull and damp. Weather remains the biggest factor when it comes to sales in the out-of-home market. It's the way it is."

He added: "The public continues to go out to eat and drink, and confidence among operators is also returning, if not yet to pre-Brexit levels." The CGA's quarterly business confidence survey last month found 75% of business leaders were optimistic about the prospects for their own businesses, with a reduced threat of oversupply and recent M&A transactions helping confidence - up 11 percentage points from the preceding survey.

Coffer's Mark Sheehan Coffer Corporate Leisure added: "It's always easy to blame the weather. But it was a long wait until May when the pub sector got the benefits of some sunshine. Better weather and a World Cup with a record 32 teams should see very strong trading for many pub businesses over the coming period.

"Restaurants and food led pubs may have a tougher summer to add to the pressures they are under. In the longer term, we see competition for casual dining chains become little less intense as poorer performing units are closed."

RSM's Paul Newman noted that while eating-out has endured a tough 2018, the recent acquisition of Pret A Manger and Rosa's "underline the enduring attractiveness of growth opportunities for overseas investors in the sector".

Analysts at Liberum said they expect the drink-led pubs to continue to outperform in the months ahead, helped by better weather and the World Cup. "Conversely, restaurant and food-led pubs are likely to have a tougher summer."

With total sales in May up 4.5% this suggests new supply of 3.1% in May and "bodes well" for Greene King and City Pubs in particular, but unhelpful for Restaurant Group and Mitchells & Butlers.

Broker Shore Capital said it continued to believe that weather remains the single most important factor to short-term trading patterns, and so look forward to the continuation of the World Cup and some pretty lousy weather comparatives during last year's summer months.

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