Locally sourced food and good service boost profits

Despite news that sales of beer are at their lowest since the 1930's, good food can drive up profits, new research has found.

Consumers are willing to pay an average of 36 per cent more for a decent pub meal if the service, food and atmosphere are of a high standard, as opposed to just 18 per cent more in a 'fine dining' restaurants, the American Express' 2008 Hospitality Monitor has found.

And for food priced at around £5, consumers are willing to pay 26p more if it is organic, 28p if it is fair trade and 30p more if it is local. A total of 42 per cent of consumers say they are influenced by a company's green credentials.

The research found that over a quarter of pubs recognise that green initiatives enhance their brand, but only 10 per cent of publicans source local produce, seven per cent sell fair trade and three per cent prioritise organic ingredients.

Kathryn Pretzel-Shiels, American Express head of hotel and restaurants, said: "It is interesting that pubs are beginning to prioritise sourcing local products, which beyond having a positive effect on image and brand, is also better for the environment and can help businesses improve their bottom line through cheaper transportation costs.

"As more 'gastro-pubs' focus on the dining experience to increase profits this is a trend that we can expect to gather pace."

"Despite the fact that the UK is facing challenging times ahead, people are still eating out, particularly in more casual establishments and this should stand the pub industry in good stead for the coming year," she said.

The research was based on interviews with more than 1,000 consumers.