Pubs grow share of eating-out market
Gains have been largely driven by daytime trade, while managed house groups have also proved better at controlling costs and holding down the menu prices of key dishes over the past few years, attracting the loyalty of diners.
Allegra Foodservice, which carried out the research for the Publican's Morning Advertiser's sister site M&C Report based on monthly tracking surveys among 6,000 consumers on its EatingOut Panel, commented that the latest results “potentially herald the resurgence of a sector that has been under significant pressure since 2007”.
Day parts
Over two years, pubs have grown their share of the breakfast market from 5% to 8.2%, and of lunch from 13.5% to 16.3%, the study shows.
They are also taking a bigger slice of the evening dinner trade, from 22.9% to 24.9%, but Allegra cautions that there have been “some peaks and troughs” with “greater competition from the branded restaurant market” in this “key day part”.
Price control
One factor that’s playing to pubs’ advantage, however, is their apparent ability to control costs, absorbing the food inflation of recent years. Allegra’s research shows that a chicken dish at Mitchells & Butlers’ (M&B) Harvester has fallen in price, from £7.95 in 2005 to £7.49 in 2014.
Similarly, a carvery meal in M&B’s Toby brand has come down from £6.65 to £6.29. Fully inflation-adjusted prices would be £10.34 and £8.65, respectively.
In contrast, the price of a quattro formaggi in PizzaExpress has risen to £10.90, £2.12 above an inflation-adjusted figure, and a McDonald’s Big Mac, at £2.79, is 35p higher than the 2005 price, taking inflation into account.
Experience
Allegra reports that “average spends have been increasing over the past year”, but warns that “there’s still pressure on eating-out frequencies”. If operators push prices too high, consumers may dine out less often.
The “encouraging resurgence of the pub after many years in the doldrums” is partly down to “the work the major pubcos have put into recruiting and helping tenants and lessees,” it says.
But it also recognises the role of independent multiple operators in developing small groups of pubs that have introduced “branded operational standards into the traditional ‘local pub’”.
“Consumers have responded to a better quality delivery, and an improved experience, certainly helped by some of the investment by pubcos.”
That’s reflected by members of Allegra’s EatingOut Panel ranking service friendliness and speed higher in pubs than in branded restaurants. “It may be that consumer expectations are higher in restaurants than in pubs, but that only puts pressure on restaurants to raise their game.
“Pubs also have a higher revisit score than restaurants, but restaurants have higher net promoter scores.
“It is a complicated market to understand, with many factors and competitors having an impact on the British consumers’ use of the pub as an eating-out venue,” Allegra concludes. “However, it is refreshing to see that pubs do seem to be showing signs of growth, and the pint glass does appear to be half-full.”
