60 Seconds: A Tale of Two Septembers

September 12 2017

Out-of-home Leisure: Weather matters

  • Structural trends in out-of-home Leisure have grabbed the headlines recently, resulting in a string of profit warnings.
  • More and more operators are stepping forward to comment on soft summer trading across the industry.
  • This is because of factors including oversupply, commodity inflation, rising labour costs, and extortionate rents.
  • Year-on-year weather variation also plays a key, albeit much more volatile, role in consumer demand. This must be accounted for.

Summer into Autumn: 2016 vs. 2017

  • The three months ending August 2017 (14.7°C) has been broadly similar to the same period last year (14.9°C).
  • This implies that the weather has had little to do with poor dining out figures so far, although figures are beginning to diverge.
  • August was ‘a cooler month’ per Planalytics. London averaged 1.4°C cooler.
  • September 2016 was remarkable. It contained the hottest day of the year (34.4°C on the 13th) and was some 2.2°C above average.
  • September 2017, meanwhile, has been considerably less spectacular; today’s avg. temperature of 15.8°C compares to 24.9°C last year…

What might this Mean?

  • If operators have found trading difficult even with stable year-on-year weather, then the September comps should be interesting.
  • The weaker demand experienced so far might be exacerbated by less inviting weather.
  • Some indoor leisure might benefit. Sites with beer gardens and outside seating will most likely see a pronounced decline.