Youth pubs hardest hit by Scots stub-out
Young person venues (YPV) in Greene King's Belhaven estate have fared worst under Scotland's smoking ban with a high single-digit percentage decline in sales, a City analyst has revealed.
Douglas Jack, of Panmure Gordon, who attended a Greene King briefing in Scotland last week, said: "The YPV market is centred as much on pubs as before the ban, but they are drinking less, partly due to going outside to smoke. By their own admission, Belhaven's YPVs are a small part of the estate and not an area of core interest.
"The read-through would be applicable to chameleon bars in England, almost all of which are privately owned."
Jack said that premises with either a good mix of food sales or licensed external areas are flourishing.
"This bodes well for the English pub estates, which have a higher orientation towards food and external drinking. For Greene King, 95% of the pubs are either food-led or have external drinking areas. Many of the other pubs - wet-led and landlocked - are likely to be divested."
Jack reports that, within the Belhaven estate, trading is down by low single digits in wet-led pubs and up by low single digits in food pubs.
Scottish beer volumes have not collapsed but the off-trade is taking market share.
Jack added: "Belhaven Best volumes are up 4% in a declining market against a historical run rate of (increases of) 6% to 10% a year. Scottish pub prices have not changed much overall since the ban, although land-locked pubs have depreciated and pubs with land have appreciated.
"There are two areas of caution: Belhaven's like-for-like sales fell by 2.4% during the summer. Trade is likely to toughen during the winter. Under these circumstances, fewer people are applying to become tenants. This scenario is likely to add to recent downward pressure on pub rental income."
Effect of smoking ban on Belhaven managed pubs' Like-For-Like sales
Wet Dry Machine Total
Pubs with less than 10% food sales
Good smoking solution -2% -2%
Poor smoking solution -5% +19% -16% -6%
Pubs with more than 20% food sales
Good smoking solution +12% +10% -11% +11%
Poor smoking solution -1% +27% -28% +8%
All managed pubs -3% +8% -11%- 2%
Source: GNK Graphics as interpreted by KBC Peel Hunt Ltd
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