Experience-focused concepts are expected to drive growth in the pubs and bars brand segment, offering interactive social events that deliver value beyond cost.
Namely, competitive socialising brands continue to demonstrate strong resilience to consumer headwinds and are expected to see robust turnover and outlet growth in 2024, according to Lumina Intelligence.
More widely, the Operator Data Index for Q1 2024 reveals the UK pub & bar market is forecast to value £23.7bn in 2024, recovering to 103% of its 2019 value.
However, outlet declines of -0.5% are expected as persistent challenges around business and labour costs put strain on operators. Widely, pubcos are restructuring to create leaner, more profitable portfolios to mitigate sector challenges.
Leading brands by outlets are forecast to total 2,465 by December, with net outlet growth of +0.4%. The Lounges remains an outlier in the pub market, with Loungers expected to grow the brand by +14.4% to over 230 sites in 2024.
Meanwhile, JD Wetherspoon, Mitchells & Butlers and Greene King are optimising estate structures through disposals of underperforming sites to improve pub operating profitability.
By turnover, the top 10 operators are expected to achieve +3.6% growth as adverse economic challenges start to ease.
Again, the Lounges continues to outperform the market, expected to see growth of +15.9%, underpinned by sustained physical expansion.
JD Wetherspoon is forecast to achieve a robust +4.5% turnover growth, having hit the £2bn milestone in 2023, benefitting from its value-led proposition.
The top ten pubs and bars by outlet growth is led by Heartwood Inns which is set to grow its estate +40.9%, driven by strong acquisition activity fuelled by investment from Alchemy Partners.
Not far behind, arcade bar NQ64 and the social darts concept Flight Club are expected to see strong outlet growth of +18.2% and 16.7% respectively, in line with the growing demand for competitive socialising concepts, particularly among Gen Z.
Boom Battle Bar is set to see +10% outlet growth during the period, and is also the leader by turnover growth, expected to see +32.6% in 2024.
This figure is +22.8% for NQ64 and +15.8% for Flight Club, growth which is driven by strategic investments aimed at enhancing space efficiency within existing sites as well as continuous offer evolution, according to Lumina.
Lumina notes that pubs and bars have undergone a number of key initiatives focused on diversification, for example Greene King’s latest concept, Nest Pubs, which expands the group’s franchise portfolio with a wet-led approach and aims to draw in high street and community patrons through competitive pricing, sports, entertainment, and a simplified food menu focused on pizza.
Meanwhile, Heartwood Inns opened its first pub-with-rooms, The White Horse in Dorking, following a multimillion-pound refurbishment. The opening marks Heartwood’s first venture under a new strategy, with a further four locations already underway for 2024, targeted at capitalising on new revenue streams and strengthening its market positioning.
JD Wetherspoon has entered its first commercial partnership with UK holiday park operator Haven. The partnership diversifies JDW’s customer base and expands its reach beyond the high street with a proactive approach.
The full report is included as part of Lumina Intelligence’s ODI subscription, a solution that provides businesses with access to comprehensive insight, data, concepts, and innovation on the UK’s branded hospitality sector. To find out more, click here.
