'Hybridisation' drives pub growth

By Carina Perkins contact

- Last updated on GMT

Hybrid pubs - which combine several different concepts - are set to drive sector growth
Hybrid pubs - which combine several different concepts - are set to drive sector growth

Related tags: Restaurant

The UK pub market is set to outpace the casual restaurant sector in terms of growth this year, as operators continue to diversify their offer, according to the latest report from Allegra Foodservice.

The report forecast that UK pub turnover will grow by 2 per cent to £21.85bn in 2015, the highest rate of growth since the recession. In contrast, the casual restaurant sector is set to achieve 0.9 per cent turnover growth.

Allegra attributed the accelerating pub growth to ‘hybridisation’ in the sector, with pubs moving into all-day dining to compete with coffee shops and provide a ‘third space’ for consumers to enjoy between the office and the home.

According to the report, pubs are already increasing their share of breakfast, lunch and dinner occasions, with 84 per cent of UK adults visiting a pub for meals or snacks in the last quarter of 2014. The average number of pub meals per head rose to a new high of 1.7, driving annual levels that surpassed both local and branded restaurants and fast food outlets.

Allegra said consumers continue to view pubs as good value for money and the sector is increasingly appealing to older consumers, with over 50 year-olds growing in importance at breakfast and lunch.

“Pubs have obviously struggled since 2007, but actions of all PubCo’s, whether managed or tenanted, corporate or small groups, are starting to change the way that consumers utilise pubs,” said Allegra Foodservice executive director, Simon Stenning.

“Pubs are reinventing their mojo and regaining their place in British society so Allegra has identified that for pubs to continue to strengthen their place in society they can focus on one of, or a combination of, four business models – all day dining, a locally relevant wet-led pub, an after-work high street pub or a food destination.

“Hybridisation of concepts and models has been one way that attracts consumers to pubs, so any possible combination of these four models will result in a hybrid pub and can potentially see the strongest growth in the pub sector.”

Future growth

Allegra forecast a ‘positive trading period’ for pubs over the next three years, with total annual growth of 2.7 per cent during 2015-2018.

The managed and branded segment is set to enjoy the fastest growth of 4.9 per cent, with managed pubs accounting for at least 83 per cent of the total £2.42bn value growth in the pub market.

Mitchells & Butlers is currently the largest managed pub operator by turnover, with total sales of £1.97bn over 2014. However, Allegra said the group’s leading position will be challenged in 2015 by the newly merged Greene King and Spirit, which will become the largest operator of managed pubs in the UK with a total portfolio of over 3,000 outlets.

Related topics: Business, Pubs & Bars, Trends & Reports

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