Pub market stabilising with trading confidence on the up

By Luke Nicholls

- Last updated on GMT

Related tags: Jones lang lasalle, Alcoholic beverage, Public house

Future expectations for trading performance across the pub sector in the short and medium-term are strongly positive at 38.7 percent and 61.4 percent respectively
Future expectations for trading performance across the pub sector in the short and medium-term are strongly positive at 38.7 percent and 61.4 percent respectively
Trading performance within the public house sector appears to be stabilising, with a survey of pub investors and owners revealing that future expectations for trading performance in the short and medium term are strongly positive.

According to the survey from Jones Lang LaSalle Hotels, 61.4 per cent of investors and owners are ‘strongly positive’ in the medium-term, with 35 per cent reporting no change in wet sales and only 9 per cent reporting a decrease. Thirty-nine per cent of respondents are strongly positive about business in the short-term.

Earlier this week, BigHospitality reported that a number of restaurant, bar and hotel operators have been warning of difficult trading conditions​ahead as the focus moves away from Britain and the packed 2012 events calendar. And just today, operator JD Wetherspoon became the latest hospitality business to warn of the possible sales growth 'hangover'​following a summer of sport, the Olympics and headline events.

But the data from Jones Lang LaSalle Hotels is a sign that the pubs market is in fact finally stabilising, having suffered badly during the credit crunch and subsequent recession. Despite a decline in food sales of up to 14.9 per cent last year, expectations for 2012 were most positive for food-led pubs, with 29 per cent of respondents identifying country dining and family food-led businesses as areas for growth.

Harry Hawksby, director in the licensed leisure and hotels division at Jones Lang LaSalle Hotels, said:  “Whilst conditions remain challenging for the UK public house sector, respondents were far more optimistic about future trading performance than 12 months ago, especially in the medium-term, London and the South East.” 

Food-led pubs

“Respondents expectations are more positive for food-led businesses, championing it as a key growth area.  Sentiment suggests neutral results for those wet-led business, moving us towards a more stabilised level of trade in a new ‘normalised’ world, albeit at a much lower base level than historically.”

“Today’s consumers are more focused on value, which typically does not necessitate the need for cheap pricing, but the delivery of good value and a quality experience.  At a local level the consumer maintains a proportion of their weekly budget for leisure spends and will not completely forgo the social enjoyment and interaction of visiting their local pub.”

Public house investors were asked by Jones Lang LaSalle Hotels to comment on the issues and problems they expected to dominate the UK pub industry over the 12 months. Unsurprisingly, the respondents’ cite that disposable income/austerity measures and off trade pricing remain the biggest influential factors on the sector, closely followed thereafter by the beer duty escalator.

BBPA Statistical Handbook

Meanwhile, the tax gap endured by British beer drinkers when compared to our EU neighbours has reached new heights and must be addressed, according to British Beer & Pub Association (BBPA) chief executive Brigid Simmonds, commenting on the publication of the association’s Statistical Handbook 2012 – the leading statistics book for the beer and pub industry.

Pint for pint, British beer drinkers now pay nine times more beer tax than the French, and 13 times more than the Germans. In the EU, only Finland slaps a higher tax on beer than the UK Treasury. The trend is set to continue, with the Government’s controversial beer duty escalator if action isn’t taken.

“Behind these numbers lie the key issues facing our industry,” said Simmonds. “With almost one million jobs depending on the beer and pub sector, action is needed to bring the tax on beer more into line with neighbouring states. This and a wealth of other data should prove an essential reference took for anyone wanting to understand this unique British industry.”

Other highlights from the BBPA’s Statistical Handbook 2012 include:

  • UK alcohol consumption per capita fell once again in 2011, from 8.4 to 8.3 litres per head
  • The decline in numbers of young people (11-15 year olds) drinking alcohol over the last decade has been significant, falling by 29 per cent since 2008.
  • Britain has more breweries than at any time since the 1930s, up from 840 the previous year
  • The average price of a pint of beer in tenanted/leased pubs was £2.85, £2.87 in independent pubs and £2.91 in managed pubs

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