Pubs, bars and restaurants in the UK saw like-for-like sales fall 0.9% in September as the consumers pull back on spending, the Coffer Peach Business Tracker reports.
London was the worst hit, suffering a 3.2% fall in collective like-for-like sales compared with September last year.
Across the sector, trading was generally better outside the M25, down just 0.7%, compared to a fall of 1.6% in the capital. Pubs and bars in London traded relatively better, down just 0.5%, while restaurants away from the capital saw like-for-likes grow marginally last month (0.2%).
Total sales growth in September among the 38 companies in the Tracker cohort was 2.6%, compared to last year. Underlying like-for-like growth for the sector, for the 12 months to the end of September, was running at 1.2%, with total sales up 4.1%.
These results follow on from flat trading through the summer, which may be credited to supermarkets recently hiking their food prices "which may have helped dampened out-of-home eating."
Earlier this month it was announced that 66% of bosses in the sector were optimistic about prospects for their own company, however only 34% were upbeat about prospects for the market as a whole, down from 43% in May.
Martin added: "Rising costs around property, tax, people and raw materials have increased pressure on margins already this year in what is an ever competitive market. Faltering sales will only add to sector concerns.
Paul Newman, head of leisure and hospitality at RSM, added: "There's no getting away from the fact that September has been a fairly dismal month for casual dining operators, especially in the capital. These sales numbers continue to be underpinned by the growing influence of food delivery and fierce discounting between brands. Operators will hope that a focus on premiumisation over the festive period will help to claw back some of this lost margin."
Videos from The Caterer archives