Pubs must offer value food, says analyst

Pubs need to concentrate on discount set-price meals and value offers on food to tempt customers in during quiet periods on the run-up to Christmas, according to market analysts Horizon.

Analyst Peter Backman warned that as consumers get used to sales and discounts on the high street, they are reluctant to pay full-price for anything — including meals out.

"Almost every non-food retailer on the high street has slashed prices to encourage consumers to spend," he said. "Restaurants, pubs and fast food outlets have to do the same to raise throughput of customers at quiet times — typically early in the week and lunchtimes.

"As the economic climate worsens customers are cutting back on their eating out. The popularity of shopping on-line is also a threat to restaurant operators as it means less people on the high street.

"Feedback I have had suggests Christmas looks bleak for the eating out sector. Some corporate hospitality organisers have seen up to 80% of bookings cancelled as companies are reluctant to go ahead with Christmas parties."

Several deals running in the London area this week include:

• Free meal on your birthday• Two for the price of one• Credit crunch lunch• 50% off the food bill• set price menu and a free glass of Champagne

Backman added: "The economy is likely to be depressed throughout 2009, and probably into 2010. Restaurateurs and licensees must prepare for this by continuing to monitor and control costs, buying more efficiently and doing their utmost to keep customers coming through the door."

Over 1,000 retail businesses have collapsed over the past year, while pubs are said to be closing at a rate of five a week. "Unfortunately we are likely to see more casualties in the eating out sector."