Data from Lumina’s Operator Data Index highlights the collapse in pub turnover between 2019 and 2021, with pub groups increasingly focused on tech, IPOs and acquisitions to help ‘right size’ estates and grow sales.
Lumina Intelligence’s latest ODI (Operator Data Index) Analysis reveals a pub sector that has been significantly challenged by limitations on indoor trading and widescale closures. This set of circumstances has encouraged major pub chains to review current financial strategies and, in some cases, look to restructure.
The Lumina report also indicates that the use of technology and delivery services remain key to sales.
According to the report, technological innovations remain vital to the pub sector, to improve the consumer experience, especially during ordering. The benefits of digital technology have shifted from minimising contact, to speed, convenience, and the ability to track orders in venues.
Greene King has reported app usage accounted for 70% of orders taken, and Mitchells & Butlers has highlighted higher spend per head, premiumisation, and trading up due to apps.
There has been an uptick in IPO and acquisition activity, with Lumina’s report highlighting recent deals including Admiral Taverns’ acquisition of Hawthorns, Punch Pubs acquiring 56 Young’s tenanted pubs, plus Nightcap going public in early 2021.
Overall, the top 10 pub groups are forecast to grow outlets by +7% by the end of 2021 and account for over 18,000 pubs.
Of the top 10 pub groups, Stonegate is forecast to remain the largest estate by the end of 2021, with just over 4,700 pubs, 60% bigger than the second largest pub group, Star Pubs & Bars. Admiral is forecast to more than double the size of its estate by the end of the year and have a marginally larger estate than Mitchells & Butlers.
Despite pent-up consumer demand driving sales post-lockdown, overall turnover among the top 10 pub groups is expected to decline in 2021, forecast to drop by 54% versus 2020. This follows a sharp decline also between 2019 and 2020. The overall 2021 forecast of £3bn turnover, is significantly down on the £9bn turnover recorded in 2019.
However, pent-up consumer demand has been cited as a key driver of sales in 2021, as Covid restrictions ease. Rising consumer confidence and summer trading in staycation hotspots have resulted in on-premise beverage sales growth. Yet, cautious optimism is needed for pub groups, as supply chain issues due to Brexit and labour shortages pose future threats.
For more information about Lumina’s ODI report focused on Pub Groups click here.
Precis
Pubs turn to tech, IPOs and acquisitions to grow
Data from Lumina’s Operator Data Index highlights the collapse in pub turnover between 2019 and 2021, with pub groups increasingly focused on tech, IPOs and acquisitions to help ‘right size’ estates and grow sales. Overall, the top 10 pub groups are forecast to grow outlets by +7% by the end of 2021 and account for over 18,000 pubs, but turnover remains significantly reduced. Cautious optimism is needed for pub groups, as supply chain issues due to Brexit and labour shortages pose future threats.
