Pubs are likely to see a plateau in growth from food sales this year with the battle ground switching to the need to offer an attractive range of drinks, according to CGA Strategy.
Chief executive Phil Tate told MCA that in order to thrive in an increasingly competitive market, all operators needed to make sure they had a strong selection of beers, wines and spirits with particular attention needed on soft drinks.
It comes as CGA released figures showing operators are getting more attuned to the challenges of Dry January.
Tate told MCA that this year’s figures showed Dry January – now in its fifth year – is maintaining its momentum.
One in five consumers now take part in the annual detox with 28% of 18-34-year-olds choosing to abstain.
Tate said the CGA data chimed with Deltic’s recent Night Tine Index in showing the nation’s resolve weakening throughout the month. Both metrics showed the over-55s less inclined to take part, with CGA putting the percentage at 14%. It also showed females (23%) were more likely to take part than males (18%).
Data from CGA Strategy’s Trading Index also showed that bars and food-led pubs increased their average weekly food sales in January 2017 by 2.6% and 2% respectively on 2016. CGA said this suggested that some people switched away from drink-led pubs in Dry January to ones that emphasise their food offer.
However, drink sales also held up well, with drink-led pubs increasing their average weekly drink sales by 2.6% on January 2016. The share of all drinks sales taken by soft drinks was slightly higher in January than averages during the rest of the year—though CGA stressed uplifts might be even higher if pubs and bars could make their non-alcoholic drinks offer more appealing.
Tate said: “What we’re seeing is that operators are much better prepared for Dry January, which is now an established part of the calendar. We think there is still a lot more to do in terms of soft drinks ranges but operators are becoming much better at offering customers a variety of reasons to visit.”
On the outlook for food sales in pubs, Tate said: “It has been a remarkable rise since the smoking ban forced pubs to look at their offer. There is still room for growth but what we are likely to see is that growth start to plateau this year.
“That is likely to lead to the return of drink as a differentiator. Customers are increasingly demanding in their expectations of a drinks offer. That needs to come across all areas and soft drinks especially.
“That’s not necessarily about having a vast range of products but about being selective. There is an expectation that there will be a basic, better and trading up option across the board.”
