Table of Contents
Executive Summary
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- The market
- Revenues rise over 2014-18 despite falling numbers of pubs
- Slow growth expected for 2019-23
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- Figure 1: Forecast of total UK pub industry revenues, 2013-23
- Weather extremes of 2018 impact the pub sector
- Rising costs for the pub industry
- Companies and brands
- Sales growth for both managed and tenanted/leased sectors in 2018
- Experiential activities and new technology boost leading pub companies
- Pub chains diversify their food and drink offering
- Pub companies continue with ethical initiatives
- The consumer
- Nine in 10 adults visit pubs or bars
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- Figure 2: Pub/bar/nightclub visiting, by time of day, March 2019
- Comforts of home trump pubs/bars for half of non-/infrequent visitors
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- Figure 3: Barriers to visiting pubs and bars, March 2019
- Pubs lead on informal occasions but lose out for celebrations
- Locally-sourced food and drink appeals to many
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- Figure 4: Interest in products and services in pubs and bars, March 2019
- Recommendations prompt visits
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- Figure 5: Behaviours related to pub and bar visiting, March 2019
- What we think
Issues and Insights
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- Consumers’ price consciousness sets pubs/bars a challenge
- The facts
- The implications
- Locally sourced food and drink appeals to many
- The facts
- The implications
- Technological innovations can bring advantages, but must not overshadow the social aspects of pubs/bars
- The facts
- The implications
The Market – What You Need to Know
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- Revenues rise over 2014-18 despite falling numbers of pubs
- Slow growth expected for 2019-23
- Weather extremes of 2018 impact the pub sector
- Rising costs for the pub industry
Market Size and Forecast
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- Revenues rise over 2013-18 despite falling numbers of pubs
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- Figure 6: UK pub industry market size and forecast, 2013-23
- Slow growth predicted for 2019-23
- Further rises in costs are on the cards for the pub industry
- Alcohol moderation trend to hinder alcoholic drinks sales
- Modest growth expected for food and entertainment
- Ageing UK population to hamper sales in pubs
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- Figure 7: Forecast of total UK pub industry revenues, 2013-23
- Forecast methodology
Market Segmentation
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- Pub turnover rises in 2018
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- Figure 8: Estimated UK pub industry turnover, by segment, 2014-18
- Cold weather in early 2018 proves a setback for pubs
- Hot summer boosts drinks more than food
- Success for pub accommodation and entertainment
Market Drivers
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- Pub closures continue
- Rural pubs get government funding to run extra services
- Rising costs for the pub industry
- Alcohol duties freeze offers relief to the pub industry
- Business tax rates rise in 2019
- Government re-evaluates pubs’ rateable value
- Rise in the Living Wage raises staff costs for pubs
- Future state of the economy is crucial for the pub sector
- Multiple uncertainties continue to surround Brexit
- Ageing UK population offers little support for pubs
- Alcohol moderation trend sets challenge for pubs
- Weather extremes of 2018 prove a problem and a benefit for pubs
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- Figure 9: Sunshine hours in the UK, by month, 2013-18
- CO2 shortage does little to dampen pub drinks sales
Companies and Brands – What You Need to Know
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- Sales growth for both managed and tenanted/leased sectors in 2018
- Experiential activities and new technology boost leading pub companies
- Pub chains diversify their food and drink offering
- Pub companies continue with ethical initiatives
Performance of Selected Leading Companies
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- Sales growth for both managed and tenanted/leased pubs in 2018
- Some operators grow sales despite reduced outlet numbers
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- Figure 10: Turnover of selected leading managed pub operators in the UK, 2013/14-2017/18
- Figure 11: Turnover of selected leading managed pub operators in the UK, 2013/14-2017/18
- Number of tenanted/leased pubs falls in 2018
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- Figure 12: Selected leading pub operators in the UK, by outlet numbers, 2014-18
- Increased experiential activities boost Ei Group
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- Figure 13: Key financial data for Ei Group (formerly Enterprise Inns), 2014-18
- Greene King receives value sales boost from the craft trend
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- Figure 14: Key financial data for Greene King, 2014-18
- JD Wetherspoon credits ordering app for sales growth
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- Figure 15: Key financial data for JD Wetherspoon, 2014-18
- Mixed results for Mitchells & Butlers brands
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- Figure 16: Key financial data for Mitchells and Butlers, 2014-18
- Punch Taverns returns to profits
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- Figure 17: Key financial data for Punch Taverns, 2014-18
Recent Activity and Innovation
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- Pub chains expand their drinks ranges
- JD Wetherspoon continues to support craft spirits…
- ….and moves to replace European alcohol brands with non-EU alternatives
- Greene King introduces kombucha in its London pubs
- Ei Group supports low-/no-alcohol beers in January promotion
- Pub chains and independents continue with ethical initiatives
- Greene King looks to address food waste with new app…
- …and links with Royal British Legion to mark the First World War centenary
- Pub chains take action on plastic straws
- Various pubs link with craft brewery to support homelessness charities
- Wetherspoon targets students with discount voucher books
- Samuel Smith’s imposes mobile phone ban
- Pubs expand their vegan offering
- Added vegetables trend extends into the pub sector
The Consumer – What You Need to Know
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- Nine in 10 adults visit pubs or bars
- Comforts of home trump pubs/bars for half of non-/infrequent visitors
- Pubs lead on informal occasions but lose out for celebrations
- Locally-sourced food and drink appeals to many
- Recommendations prompt visits
Frequency of Visiting Pubs and Bars
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- Nine in 10 adults visit pubs or bars
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- Figure 18: Pub/bar/nightclub visiting, by time of day, March 2019
- Pub visiting frequency is linked with financial health
- Men drink at pubs more often than women
- Most people visit pubs/bars only occasionally
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- Figure 19: Frequency of visiting pubs/bars, by time of day, March 2019
- 18-34s are the core pub/bar visitors
Barriers to Visiting Pubs and Bars
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- Comforts of home are more compelling for half of non-/infrequent pub/bar visitors
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- Figure 20: Barriers to visiting pubs and bars, March 2019
- Link-ups with home delivery and streaming services should benefit pub/bar operators
- Noise levels in pubs are a major reason for people preferring to stay at home
- ‘Quiet zones’ appeal strongly to those who find pubs too noisy
- Price considerations deter four in 10
- Venue-exclusive drinks can help pubs to better compete with retail
- Regularly rotating drinks lists should appeal especially to younger people
On-trade Venues Favoured for Particular Occasions
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- Pubs are the go-to venue for drinks at all times of the week
- More people choose pubs for drinks at weekends than weekdays
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- Figure 21: On-trade venues favoured for particular occasions, March 2019
- Pubs lead when people want to relax
- Pubs lag behind restaurants for celebrations
- Pubs are the top choice for taking advantage of good weather
- Need to remind people of pubs’/bars’ suitability for all weather conditions
Interest in Products and Services in Pubs and Bars
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- Locally-sourced food and drink appeals to just under half of patrons
- Local sourcing can help to strengthen pubs’ image as supporting the local economy
- Local sourcing can tempt people willing to go further afield
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- Figure 22: Interest in products and services in pubs and bars, March 2019
- Trendy food and drink appeal especially to under-35s…
- Sourcing ingredients for trendy dishes locally should boost appeal
- …as do in-house alcoholic drinks
- Interactive elements should help to build consumer engagement
- In-house drinks team up well with locally-sourced food/drink
- Technological innovations appeal particularly to under-35s and parents
- Ordering apps offer advantages to both venues and customers…
- …but pubs and bars must not neglect the social aspects
- Foodservice sector offers potential cues on computers in venues
Behaviours Related to Pub and Bar Visiting
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- Recommendations prompt visits…
- …and should be well-placed to persuade people to venture out of their local area
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- Figure 23: Behaviours related to pub and bar visiting, March 2019
- Discount vouchers and shared knowledge marketing messages should help to incentivise recommendations
- Six in 10 stick to the same brands in pubs and bars
- Use staff recommendations to drive trial and add value
- Look to harness the power of peer recommendations
- Sampling opportunities should appeal
- Opinions are divided on whether independent establishments offer better quality than pub chains
- Younger people are especially likely to rate the quality of independent pubs
- Focus on provenance should benefit both larger and smaller establishments
- Price is a major influence on choice of pub
- Local sourcing can help to appeal to those who are not influenced by price
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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- Figure 24: Forecast of total UK pub industry revenues, 2018-23
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