Pub industry ‘buoyant’ as restaurants suffer, data shows
AlixPartners managing director Graeme Smith told MCA's Pub Conference that trading figures confirm the relative resilience of British pubs, “despite noise surrounding the consumer sector”.
He said bigger pub groups had attracted trade away from independent, smaller pub groups and raised expectations for the whole pub industry.
Smith said the move by many pubs to embrace a broader trading window had attracted investors. He also praised licensees for introducing provisions like coffee and breakfasts, highlighting JD Wetherspoon's sales of coffee in particular.
Smith said at the London event, pub trading multiples had stabilised over the past two years in comparison to the decline faced by restaurants.
Research from CGA showed a 1.5% yearly decline in restaurant collective like-for-like sales, in March. The Coffer Peach Business Tracker saw an increase of 1.3% in the like-for-like sales at pubs.
Positively disposed to pubs
Market dynamics favour pubs over restaurants according to Smith. He said: “Pub supply correction is well progressed whereas, for restaurants, it is just beginning.
“We as a nation are seen as very positively disposed to pubs.
“Menus are more positively received by customers when they’re in pubs than when the same menu is in a high street restaurant.”
Smith noted a decline in trading multiples in June 2016 as a reaction to that month’s referendum on leaving the EU. However, he said despite this initial reaction, the industry had bounced back in the face of Brexit and been stable ever since.
In particular, London and south-east operators continued to trade at premium.