According to industry research, prospects remain grim for businesses that are not serving food. However, fewer pubs are closing in the UK each week at 25 public houses per week, compared to 37 a week last year, according to Jones Lang LaSalle (JLL).
Jones Lang LaSalle’s pub property sentiment survey which is published this week, drinks only pubs are the worst effected by financing and declines in disposable income, which continues to depress the sector.
The director in the licensed operators division, Harry Hawksby, said that while there was “a sense of optimism” in the sector, “the next twelve months are likely to see the market continue to polarise, with public houses which offer food performing much better than their traditional alcohol-only counterparts”.
JLL found that trading performance had worsened for more than two-thirds of drinks only business, while only 23% of total respondents said turnover had fallen.
According to industry observers, approximately half the money Americans spend on food is used to buy meals eaten outside the home. In the UK, numbers from the publicly listed pub companies have appeared to shore up the trend, with revenues from food leading same-store sales growth. With this news, it has been predicted the UK will move towards the USA in its dining habits.
However, research from the foodservice consultancy, Horizons, shows that people in Britain are cutting back a year; a survey of 1,400 UK residents which was published last week, found that people had reduced the number of times per week they dined out, with the average moving from 1.4 times a week in 2010 to once a week in 2011.
According to JLL, the location of pubs is key to their outlook. Businesses in the south were much more positive about the year ahead than those in the north and midlands – with the exception of Edinburgh and Glasgow. JLL’s survey showed the buyer-to-sell ratio for the UK pub market was 1:1, “which would suggest a well balanced market”.
Even though pubs may need more money to start serving food, e.g. for restaurant insurance quotes, supply costs, wages for staff and other restaurant staff including chefs, this report shows that in the long run, food remains crucial to the future of pubs.