UK Pub, Restaurant Trading Improves in June - Study

By Simon Zekaria

LONDON--Trading for pubs and restaurants across the U.K. improved in June, boosted by the Queen's Jubilee bank holiday and the European soccer championships, even as poor weather weighed, a study issued Wednesday showed.

The Coffer Peach Business Tracker reported that comparable sales rose 1.3% in June from the same month last year, following May's 2.6% increase. Total sales, which include new openings, rose 5%.

The tracker monitors trends in the eating and drinking-out market by collecting monthly performance data from 25 companies, including Whitbread PLC (WTB.LN), Mitchells & Butlers PLC (MAB.LN), Spirit Pub Co. PLC (SPRT.LN) and Marston's PLC (MARS.LN).

Still, analyst Peter Martin of Peach Factory, a market intelligence group that produces the report in partnership with UBS AG (UBS) and investment advisory service The Coffer Group, said the results were mixed across different sectors.

"While drink-led pubs saw a healthy jump in like-for-likes, casual restaurant chains suffered a corresponding fall against June last year," Mr. Martin said.

Jonathan Leinster, head of UBS European leisure research, said the numbers show consumers are looking more at value, which is a trend that is hurting branded restaurants.

The effect of the Olympic Games in London is also hard to gauge, Mr. Leinster added.

"The dominant impact in July will be whether the Olympics has a significant impact, which remains an unknown."

Economists and businesses also remain concerned that economic weakness, fuel costs, below-inflation pay rises and unemployment are crimping consumer spending.

Panmure Gordon analyst Simon French said: "We note that fuel prices are starting to rise again, despite the postponement of the fuel duty increase until January 2013. All these moving parts are making it increasingly difficult to identify underlying trading patterns."

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