High levels of inflation coupled with unrestricted trading mean the pub market will return to just under its 2019 value this year, to £23bn, according to Lumina Intelligence.
Speaking at MCA’s Pub Conference yesterday, Lumina’s senior insight manager Katie Prowse said the sector was due to grow by 55% in 2022, to reach a value just 0.1% under its 2019 figure.
“Sustained high inflation across 2023, will see the market surpass its 2019 next year,” she said.
Prowse explored the future of pubs, from a market turnover perspective, and took a deeper dive into consumer behaviour and menu trends.
“With little net outlet growth in the market, value growth will need to come through increased spend per transaction and increased footfall as opposed to net new space,” she said.
She spoke about how pubs can boost spend per transaction, for example by investment in their estates and the premiumisation of their offering, using Marston’s and Stonegate Group as examples.
Marston’s is reviewing its 2-4-1 brand and has indicated that this value brand could be exited and replaced with its more premium Signature offering. While Stonegate has launched its first site under its new premium division The Chapter Collection, made up of premium food-led pubs initially in city centres.
Prowse said that while increasing footfall would more be more of a challenge, Lumina’s latest Eating and Drinking Out Panel data was fairly positive about the direction of footfall in recent weeks, with the percentage of UK adults who visited a pub in June up a further 0.3ppts on the previous month.
In order to entice customers through the door pubs should note that they are becoming more price-led – up 2ppts – therefore emphasising value for money credentials through promotions, loyalty schemes and good quality products and services will be very important.
There are also several other ways that operators can boost sales, such as delivery, which Prowse said had shown “extremely strong growth” in the pub channel, while investment in digital, thereby making the experience of visiting a pub easier and more convenient, is crucial.
“Distinguishing a pub visit from being at home is really important, with pubs one of the more expensive eating and drinking out occasions,” she added.
