Coronavirus hits Britain’s bar sales in February
The coronavirus outbreak caused a 2.8% sales decline for Britain’s bar chains in February and is expected to have an “increasingly negative impact” on the on-trade in the coming months.
According to the latest data from CGA’s Coffer Peach Business Tracker, managed pub groups in Britain witnessed a sales drop of 4.2%, while restaurant groups reported a smaller decline of 1.8%. Total sales for Britain’s managed pub, bar and restaurant sector sank 2.2% compared to February last year.
CGA attributed part of the sector’s decline to floods, which hit parts of Britain in early February and caused some pubs and restaurants to close.
However, as the month went on, the coronavirus (Covid-19) pandemic hit the industry. There are now 460 confirmed cases in the UK, the majority of which are in England. London has the highest number, with 104.
The Coffee Peach Business Tracker showed that results for the sector in the last week of February fell 4.4% compared to the same period in 2019.
“We know that members of the cohort will be watching the weekly results closely to track the market performance through these uncertain times,” said Karl Chessell, business unit director of food and retail at CGA
“It is impossible to predict how bad the effect of the coronavirus emergency will be on the market longer term, but as CGA’s snap poll of industry leaders last week showed, operators are expecting major disruption.
“All we can say from these figures is that all parts of the business are being affected, and the worst is probably yet to come.”
Pubs witnessed a slump in both food and drink sales, with a 3.9% and 4.6% decline, respectively.
The data also noted that the managed pub, bar and restaurant sector in London took the biggest hit with sales down 3.7%, compared to the 3.2% drop outside the M25.
Paul Newman, head of leisure and hospitality at RSM, which produces the tracker with CGA and The Coffer Group, said: “At the beginning of the month, it seemed that the government’s new immigration proposals following Brexit would be the next big challenge for the sector.
“These proposals have been swiftly eclipsed by the social and economic disruption from coronavirus. The latest industry like-for-likes point to the start of a prolonged period of falling sales for restaurant and bar businesses.
“The leisure and hospitality sector will welcome the support announced in yesterday’s budget to deal with what could be a massive hit to short-term cash flows.”
In the UK budget yesterday (11 March), the government revealed it had abolished business rates for leisure and hospitality businesses this year in the wake of the coronavirus outbreak, along with a number of other measures.
Trevor Watson, executive director, valuations at Davis Coffer Lyons, said the “biggest fear” for operators is “staff infection which would necessitate complete closure”.
He added: “Paradoxically, local pubs and restaurants might see trade sustained as people stay local – people will not shut themselves away indefinitely and will see smaller scale local pubs and restaurants as less of a health risk. This will undoubtedly lead to a re-distribution of trade.”
The rate of closures of pubs and bars in Britain has slowed to its lowest level since early 2018, but drinks-led venues remain under “severe strain”.