Although rent is now at its lowest proportion of turnover for the past 5 years, and is falling across all pub market segments, there remains a differential of 1.7 percentage points between tied and free-of-tie pubs.
Among tied pubs, rent averages 10.7% of turnover, which is down from 12.3% in 2012, but still higher than the 2010 figure of 9.4%. Among free-of-tie leased pubs, rent averages 9.0% of turnover, which is down from 10.7% in 2012.
Kate Nicholls, ALMR strategic affairs director, said: “Whilst community local operators have seen a resurgence, those operating under tied leases in particular continue to struggle – reporting below average capex, margins and growth. For the second time, tied rents as a percentage of turnover were higher than rents for free of tie and commercial leases.
For leasehold pubs as a whole the average rent is 10% of turnover, though the ALMR notes this figure is slightly skewed by the increasing number of peppercorn entry rent deals, without which the figure would be closer to 12%.
The report also shows that gross margins on wet sales in tied pubs average 61.7%, compared to 66.2% among pubs on free-of-tie leased pubs. Gross margin on food sales in tied pubs average 58.5%, compared with 61.8% in free-of-tie leased pubs.
The ALMR’s Benchmarking Report 2013 survey covered 36 companies operating 2,100 outlets – with all data reported at outlet level. The majority of respondents are small companies – 83% operate fewer than 50 outlets and two-thirds fewer than 20 outlets.
There is a roughly even split between leasehold (53%) and freehold (47%) premises; of the leasehold premises, 56% are with pubcos or brewers, and just 1% of these are free-of-tie (down from 6% two years ago).