Food sales among multiple operators of licensed premises are at a 10-year high, according to a comprehensive annual survey by ALMR.
While food accounted for 32% of all revenue, wet sales slipped to their lowest level in the 10-year history of the Association for Licenced Multiple Retailers’ benchmarking survey.
Like-for-like growth across all segments averaged 3.1%, which represents growth of 2.3% in real terms, excluding inflation.
Licensed accommodation outlets recorded the highest like-for-like growth, while wine bars and nightclubs lost further ground to High Street bars.
Though wet sales were down, gross profit margins were up at 71.5%, indicating revenue growth is being driven by pricing.
Meanwhile, food margins were down at 61.5% due to the impact of food price inflation not being fully passed on.
The average overheads associated with running a licensed premises increased by 1.6ppts in the year and now stand at 49.3% of annual turnover.
Payroll costs remain the most significant cost for operators, rising to 27.8% over the year.
The introduction of the National Living Wage in April 2016 fell outside the survey period, with the legislation expected to negatively impact profitability in future surveys.
Produced with Christie & Co, participation in the annual survey was up almost 20%, with 48 companies providing data on a total of 2,688 managed outlets.
Produced primarily for the ALMR members, the data helps operators benchmark themselves and competitors in order to inform policy and strategic business decisions.
Though food-led outlets reported subdued growth in the year, in the longer term they have continued to outperform the wider market, growing by around 56% in the seven years to September 2015 - significantly in excess of the RPI of 18.9% reported over the same period.
Higher margins of 75% were achieved on food sales by casual dining outlets, showing the benefits of a fully food-orientated operating model, according to the ALMR analysis.
The report concludes: “The growth of food-led pubs and casual dining is one of the key takeaways of this year’s report, and food sales across the survey now account for their highest proportion of total turnover ever.
“Despite this, growth is beginning to slow, and we anticipate that there is a limit as to the level of food sales that licensed premises can achieve without sacrificing overall performance.”