Shares in The Restaurant Group jumped more than 8 per cent in early trading after it issued a positive trading update ahead of its annual meeting on Wednesday.

Alan Jackson, chairman, said trading in the group's 300 outlets which include chains such as Garfunkel's, Frankie & Benny's and Chiquito, had been "very encouraging" so far this year. That could ease concerns that weaker consumer spending was making trading difficult for companies in the restaurant sector.

He said the good trading reflected the group's value for money proposition. The group largely operates away from the high street in places such as leisure parks and airports.

In morning trading the shares were up 12p at 159p. In January the group suffered a one-day share price fall of nearly 30 per cent to 123¾p after it said sales had slowed over the Christmas period. That had come after profit warnings from rivals Clapham House and Regent Inns, which had cast a shadow over the whole sector.

On Wednesday Mr Jackson said like-for-like sales in the first 18 weeks of the financial year, to May 4, were up 5 per cent, a faster rate of growth than he had reported at the annual meeting last year.

Group sales were 21 per cent ahead in the same period, aided by acquisitions such as the purchase of Brunning & Price, a 14 outlet pub restaurant chain, last autumn.

Mr Jackson said the group planned to open 30 to 35 new restaurants during the current financial year and seven had opened so far including four at Heathrow's Terminal 5.

Analysts pointed out that the like-for-like sales increase of 5 per cent was an acceleration from the 4 per cent increase reported after the first 9 weeks of the year.

However, the group said it was not changing its outlook for the year from its statement in March when Mr Jackson predicted "a year of progress".

Douglas Jack, analyst at Panmure Gordon, said it would be premature to increase estimates for the year, and the group would be up against tougher comparative numbers later in the year. Even so he said the statement underpinned his above consensus forecast.

Mark Brumby of Blue Oar Securities said the statement showed the danger that "the baby gets thrown out with the bathwater," with The Restaurant Group likely to "perform well against a more challenging market."