Coffer Peach Tracker: Could have been (much) better…

September 16 2016

Tracker headline ‘Britain enjoys summer by still eating & drinking out’ doesn’t tell full story:

  • Says LfL sales +0.6% & frames this as a success
  • But CPI is +0.6% so above implies no growth
  • NLW, NMW etc. mean labour costs +5% & inflation re F&B in the pipeline
  • And c5.6% increase in unit numbers could be a problem

A very mixed picture:

  • London pubs & restaurants +2.9%, provinces minus 0.1%
  • Pubs in total +1.2%, casual dining outlets minus 0.4%
  • Story diverges for London riverside pubs vs Stoke, Crewe or Scunthorpe me-too restaurants

And the weather, please, it made a major difference:

  • Notwithstanding GNK’s cautionary comments last week, August weather was good
  • We go into detail here; August 2016 was warmer, drier & sunnier than August 2015
  • Some pubs were +40%, +50% or more over the August Bank Holiday weekend
  • This all fed into the mix to give a blended, rather anaemic +0.6% overall
  • Hardly heart-stopping, there must have been some major losers out there

Speaking of which…:

  • A glance at the Coffer Peach Tracker will provide a list of contributors
  • There are some tired, over-expanded, entitled & some would say lazy brands out there
  • High margins are perhaps only a good thing if they are 100% defensible
  • We prefer (some) new entrants
  • But fully accept investors can’t get £10m, £100m of £1bn into a host of smaller companies
  • And therein lies a major opportunity, doesn’t it…?