Pubs on the upturn thanks to warm weather sales boost

Pubs are set to see a resurgence bolstered by the World Cup and warm weather, the BDO Restaurants and Bars report has suggested.

Hot weather in May helped boost trade across the UK for pubs, however, the Coffer Peach Business Tracker indicated a decrease in restaurant sales.

Overall, pub, restaurant and bar groups saw a collective like-for-like sales up by 1.4% and 4.5% total sales growth.

Managed pubs saw an overall like-for-like sales increase of 3.5% whilst casual dining brands experienced a decrease of 2.1%. London outperformed the rest of the country with like-for-like sales up by 1.6% against an overall 1.4% increase outside the M25.

With the World Cup continuing in Russia and a warm June, the outlook for the industry remains positive. BDO analysts have predicted a profitable summer for British pubs, especially if England make it into the final stages of the competition.

BDO also predicted that the sector would see an increase in M&As over the next 12 months.

Tom Barnard, director of M&A at BDO, said: “The last 12 months has seen pubs and wet-led concepts playing a more prominent role in sector M&A following a numbers of years playing second fiddle to casual dining brands.

“These wet-led pubs have demonstrated a resilience compared to their casual dining and food led pub peers, benefitting from less competition, higher margin premium products and craft beer, the luxury of having a more flexible operating model without the need for chefs and suffering less impact from food cost inflation.”

“Similarly, the wet-led concepts do not require expensive kitchens, driving down the day one fit-out cost and boosting return on capital, a key metric for investors who have started to take note of the attractive returns available in the sector,” he added.