It has been a slower start to the year than expected, and needed, for pubs. Frequency and penetration within the pubs and bars sector remained flat year-on-year with 9.8% of UK adults having at least one pub or bar occasion in a week and 1.2 visits per week.
Pubs and bars have lost share of total out of home occasions (-0.4ppts to 14.1%) as retail and QSR benefit from consumers cutting back on the more discretionary visits. Non-essential spending declines means that operators are having to do more and offer a wider variety of reasons to visit to drive customer occasions.
Soaring energy prices, continued high food and drink price inflation as well as industrial action on the railways is inhibiting pub market growth and leading to unviable conditions for some.
Outlet growth is a core inhibitor to market growth, with seven pubs forecast to close every week in 2023, down from highs of 20 across the pandemic, but still a notable rate of decline of -0.8%. To overcome the plethora of challenges, investment in estates and innovation in ideas is crucial to get consumers through the door.
Events for all the family
It is expected that across the next few years there will be a wider array of special events, from live music and films to gaming and family-friendly seasonal events, as pubs seek to engage audiences and leverage a variety of revenue streams.
Independent venue Perry Hill Pub, in South London, for example, has been developing creative events aimed at engaging the whole family and utilises social media channels including Instagram to advertise them.
Across Easter it offered several free events, including egg decorating weekdays and a weekend Easter egg hunt. In the May half-term, the pub offered movie events to customers for free, generating footfall across quieter weekday periods.
Sport is not a new phenomenon for pubs, but groups are beginning to develop initiatives to carve out what the future of sports pubs looks like. Stonegate Group’s new premium sports model – Clubhouse 5 – is looking to deliver an experience not adrift to what consumers experience in a sports stadium.
Its Leicester Square site is looking to combine larger sporting events with live entertainment to re-create the stadium experience. Recently the pub hosted a Q&A session with retired Manchester City player Wayne Bridge before the team’s Champions League tie against Real Madrid.
Outdoor cooking and dining
As consumers become more value-conscious (+4ppts year-on-year) and food price inflation continues to top double figures, pressure on operators to offer good value food yet retain viable margins deepens.
Operators are shouldering a large proportion of these price rises, evident by the fact that same-line dish price inflation across pub and bar menus were just +8.1% from March 2022-2023. But the summer months offer the chance for operators to maximise revenue opportunities through utilising outdoor space for drinking and dining.
One pub capitalising on what outdoor cooking offers is award-winning gastropub The Black Bull in Cumbria.
The site has a custom-made BBQ, fire pit and pizza oven to allow for full kitchen service outside. The operator purchases its meat in the form of whole animals from local farms, and so fire-fit and BBQ cooking methods allow the business to utilise every cut, driving cost efficiencies through nose to tail.
Cooking over fire adds to the site’s experience credentials and allows for a more informal service to the indoor menu. Smokers, fire-pits and BBQ cooking can also allow operators to manage costs. Smoking meats allows for operators to purchase cheaper cuts, enabling for a lower price point yet not compromise on the taste or quality.
The UK pubs and bars market is expected to recover just +1% past its 2019 value in 2023, to £23.3 billion, despite the high levels of inflation. As the market remains challenging, creativity in food, drink and experience aspects will be key to the success of operators in the coming months and years.
Investment in estates and innovation in offer to deliver a differentiated experience will boost footfall and drive sales per head.
There is still time to book your last minute places to MCA’s Pub Conference. Taking place at the HAC in London tomorrow (20 June), the event features a full programme of speakers, with the likes of JD Wetherspoon chairman Tim Martin, Nightcap’s Sarah Willingham and Oakman Group’s Peter Borg-Neal taking to the stage.
While Lumina Intelligence’s insight director Blonnie Whist will share highlights from the hotly anticipated Lumina Intelligence Pub Market Report and set out the latest consumer, menu and operator trends that are driving growth.
To view the full agenda and to book tickets, please click here.
