We may only be just out of a freak heat wave but it won’t be long before it is about open fires, comfort food and the lead up to the festive trading season. And planning is going to be crucial to make sure licensees reap the rewards of Christmas this year.
It may be the season to be jolly but let’s be honest, inflationary pressures and a cost-of-living crisis means every pub in the country is facing major challenges.
Trading has been slow to get back to pre-pandemic levels with the average pub seeing a drop in sales of £855 over the key trading dates during Christmas 2022, according to Oxford Partnership’s Christmas Flash Report.
How lower ABV wines will help pubs financially
Lanchester Wines’ Tom van der Neut says: “With the recent changes to UK alcohol duty (from 1 August 23, alcohol duty is based on ABV) and further changes planned for 2025, publicans will increasingly be looking to lower ABV drinks to ensure they remain competitively priced.
“UK wine importers, such as Lanchester Wines, are already working with winemakers to harvest early, therefore reducing ABV without compromising taste.
“Sparkling wine will always have a place on a Christmas wine list. Indeed, the sight of tiny bubbles rising to the surface of a wine creates an alluring and celebratory ambiance, making it a popular choice for special occasions.
“And sparkling wines are increasingly attractive following the UK duty rate changes, which reduces the cost of a 6x75cl case (for sparkling wines with an ABV between 11.5% and 14.5%) by £1.12 per case.
“The reduction is even greater for typically lower-ABV wines, such as Prosecco, while some consumers will take advantage of this price drop to upgrade their festive fizz from a sparkling wine to Champagne.”
For more details, visit Lanchester Wines by clicking here.
And we know consumer confidence is fragile. But it is not all doom and gloom as CGA’s Christmas Report 2022 reveals 78% of consumers went out over the festive period last year — 20 percentage points more than in 2021.
But what can licensees do to prepare and how can they get those customers out of home and into the pub to celebrate?
Offering that wow factor and something the customer can’t get at home is a sure-fire way to get them coming into the pub.
It wouldn’t be Christmas without a mention of the Churchill Arms in London’s Kensington. The pub, which is known as the most Christmassy in the UK, has been celebrating the festive season with its famous trees and lights since 1990.
This year is set to be no different with 60 x 7ft Nordmanniana trees with 150,000 LED lights planned for the outside of the two-storey pub. And it doesn’t stop there. The pub is decorated inside and out with frosted berry garlands, candy cane archways, natural garlands, half moons, reindeers, Santas, lampposts, a snowman as well as 12 Christmas flags. A Santa letterbox is a regular feature positioned at the entrance meaning that lots of children come to post their letters and cards to Santa.
It serves a range of Fuller’s beers, craft lagers, seasonal winter ales, cider, spirits, artisan soft drinks, as well as having an extensive wine menu. Over the festive period, mulled wine and mulled cider are especially popular.
Fuller’s manager James Keogh, who took over running the pub in 2013, has continued the tradition of making Christmas “magical”, which has proved to be a trading winner attracting everyone from tourists, locals, families to TV crews.
He says: “We are full from 11am until closing time from 15 November, when we switch on the lights. It brings in loads of tourists and because of Instagram and social media we are highlighted all over the world.”
Keogh says that being prepared is key to getting Christmas right.
“We plan before the summer for Christmas. We talk about new ideas, time-frames, buying new things and plan ahead to agree costs. It means if there are any issues with supplies these won’t be a problem,” he says.
“Lots of pubs decorate the inside and then do nothing on the outside. Can they look at the pub from across the street as a customer? Is there something that would draw them into the pub? Try it and enjoy it and put heart and soul into it because you want to reap the rewards from all the trade you get from it.”
Donna Brayshaw, licensee at the Sun in Lepton, near Huddersfield agrees. She organises the Christmas lights turn-on event for the village and decorates the outside of the pub with a massive Christmas tree, reindeer, snowman and lights.
“People like to celebrate and have something to look forward to,” she says
“I start thinking about Christmas in January. It is just much easier than leaving things to the last minute. If you are trying to book bands and things like that and leaving it until September then you have no chance.”
One challenge she highlights is the changing habits of consumers who have become more demanding since the Covid pandemic.
“They will come out [on] Christmas Eve because it is Christmas Eve and New Year's Eve. But the rest of the time they need something to come out for,” she says.
She is running events on the three Saturdays in the lead-up to Christmas with two bands and one disco planned. While the pub is wet-led, it caters for Christmas parties providing buffets on request and collaborates with other companies such as catering vans to drive business.
“Pubs should have started advertising events as early as August. We find that as soon as the kids break up and it’s the back-end of the holidays, people are already saying to us ‘what is going on for Christmas?’,” she says.
“Drinks wise, we make sure we have a good whisky selection in for Christmas and a good gin selection. We also widen our prosecco and champagne menu.”
"Ticketed events means we can keep a bit more control because the utilities aren’t spiralling."
One pub has been taking a different approach to operating in the challenging climate is Ye Olde Sun Inn in Colton, York, run by Kelly and Ashley McCarthy.
They have completely changed their business model turning it into a venue to tackle the ongoing trading challenges.
Winter hours see the pub opening Fridays and Saturdays for customers but they operate a number of bespoke events, from chocolate or cocktail masterclasses to Christmas work parties – meaning they can plan and budget efficiently.
One Christmas event that proves popular is the ‘Breakfast with Santa’, which is running for five dates in December this year on Saturdays and Sundays from 9am to midday.
“People are looking for something different. You get more for your money when you have an experience involved,” Kelly McCarthy says.
“Also ticketed events means we can keep a bit more control because the utilities aren’t spiralling and we are not opening and waiting for people to come in the door. People will pay in advance so it helps us with budgeting.”
The pub is set to open for Christmas Day this year offering a six-course menu. To keep a close eye on costs and supplies, it is offering three choices in starter, mains and desserts rather than the usual five and people are being asked to pre-book their choices – meaning there is little waste.
The pub is also upselling on other items including its own handcrafted spirits from its own Fairfax Distillery and Chocolates shop, events such as cocktail blending sessions and experience gift vouchers.
Getting the food offer right
One area where pubs can reap the rewards over the festive season is by offering an interesting range of menu options whether it be that Turkey Dinner with the trimmings or a party buffet. But there are challenges in the market with supply, pricing and the cost-of-living crisis.
Rachel Dobson, managing director of hospitality buying specialist Lynx Purchasing says pubs need to plan for Christmas 2023 menus carefully.
“There will be those consumers who need to restrict their spending as the cost-of-living crunch continues but, equally, there will be those who may have been going out less often this year but will want to treat themselves when they meet up with family and friends in the run-up to the festive season,” she says.
“It’s important for pubs to plan a range of menu options at different price points. There will be customers confident to book a full Christmas dinner with all the trimmings, and by also offering choices such as a two-course Christmas special, or a buffet menu, pubs will be able to appeal to a range of customer budgets.”
She highlights that it is important not get caught in a “race to the bottom” in terms of price and quality as independent pubs won’t be able to compete when it comes to offering the cheapest turkey dinner. She advises them to focus on offering high quality produce, with a focus on the best of British.
Dobson admits that high inflation, increased labour, energy and transport costs, the war in Ukraine and extreme weather this year could impact across many festive food staples, from the cost of feeding turkeys, to veg such as potatoes, parsnips and Brussels sprouts.
She advises pubs to buy produce when it is in season, and keep menu descriptions flexible to make the most of any changes to supply.
Offering a good drinks range
It’s not just Christmas food that consumers expect, but every pub needs have a wow factor on their drinks’ menu.
Whether it’s that festive seasonal pint in the bar, wine, cider, cocktails, spirits range, or interesting non-alcoholic options for those driving.
Wine is the obvious drink to upsell when people are eating out during the run up to Christmas period.
"Red wine and cocktails are the top two drinks categories in which consumers are willing to upgrade."
Tom van der Neut, business unit controller at Lanchester Wines, says the festive period creates one of the simplest opportunities to make profitable adjustments on the wine list.
“Sparkling wine is the obvious addition to a wine list at Christmas, whether by the glass or by the bottle – perhaps a trade up on the size of bottle, to a magnum or even a jeroboam for extra special celebrations,” he advises.
He also suggests “something to fill the gap” in the middle of an existing sparkling wine list with many French or English products filling this opportunity between Prosecco and Champagne. But it is not just about offering premium.
“Consumers may well be watching the pennies this festive season, so in the same way you want to maximise those trading up, you still need to have the easy wins and great wines for those customers watching their budget,” he adds.
“You know your customers better than anyone, so create a Christmas wine list that directly suits their specific tastes – and likewise, if something isn’t working, change it.”
Grace Robertshawe, senior trade marketing manager at Accolade Wines, predicts strong performance from red wine, hot alcoholic drinks, and sparkling wine.
“Where premium options are concerned, red wine and cocktails are the top two drinks categories in which consumers are willing to upgrade, so offering ‘limited edition’ or special ‘festive’ serves during this time is key to driving incremental sales,” she advises.
“Growing in popularity, wine cocktails can provide a route into premiumisation – more and more experience-led – rather than just a place to come for food or drinks, venues should look to offer experiences that become a ‘reason to visit’ in themselves.”
She advises licensees to consider themed evenings offering food and drink under an over-arching theme with the added benefit of bookable tickets to guarantee footfall.
This is a view backed by José Ignacio Bascuñan, export director for Europe at Morandé Wine Group who advises licensees to consider creating special experiences.
“People are looking for opportunities to share experiences with family, friends and colleagues at this time of year, so consider offering festive tutored wine tastings (12 ‘days of’ Christmas Wines), cheese and wine pairing floats, or Christmas movie nights tied in with wine and food,” he says.
Spirits are a popular choice for consumers over the Christmas period providing a great opportunity for premium serves.
Rich Holt, on-trade director, Bacardi says the biggest trends in premium are Tequila, rum and darker spirits which are “perfect for the long, winter nights.”
“The future is premium – it’s an ongoing trend – and it makes complete sense over Christmas when people typically like to treat themselves and others,” he says.
“Given the current economic challenges for so many, look at the current hot categories to select any new products or promotions, so you have some comfort the consumer will try and buy.”
And the perfect drink to celebrate the festive season – cocktails – and the plus side is these offer a good margin to the operator.
“The good news is that the consumer demand for cocktails is growing. Within the last year, sales have doubled, presenting an unmissable opportunity for pub and bar operators to benefit,” Ben Anderson, marketing director at Funkin Cocktails says.
"It’s important that operators deliver an experience that cannot be replicated at home."
“On average, drinkers are prepared to spend £9.05 on a cocktail compared with £5.55 on a spirit and mixer, so investing in the right cocktail range is a simple, low-risk way for venues to boost margins.”
But you can’t forget those non-drinkers or drivers when considering your drinks offer.
Pat Humphries, associate director on-premise at Coca-Cola Europacific Partners GB says in the run up to Christmas 2022, sales of soft drinks saw a 20% increase in value.
Humphries adds that quality, varied and fairly-priced festive menus are key to driving footfall and that delivering the perfect serve, with branded glassware and garnishes, is an immediate way to elevate any drink.
“With consumer spending still under pressure from the high cost of living, it’s important that operators deliver an experience that cannot be replicated at home – so they can justify going out and paying for it. Don’t forget to shout about these experiences on your website and social media pages to help drive footfall into your outlets,” Humphries advises.
Whether you are offering the monthly themed Christmas pub quiz, Santa’s Grotto or the local disco – having another string to your bow could be the way to get those customers out of home and enjoying some social time in the pub.
UK & Ireland country manager Ben Minter from The Social Gaming Group, home to Play SHUFL. and FLYBY interactive darts, says September is a good time for pubs to brainstorm ideas.
“Consider your target audience and plan accordingly. If you’re looking to tap into the Christmas office party market and group bookings, then you need to consider the type of entertainment you offer,” he argues.
You have your food and drink menus ready and entertainment organised so how do you get the customers into the pub?
Marketing early will be the best way to get those pre-bookings and make sure all potential customers know early what is available.
“My advice for pubs is to start as of yesterday. Consumers are picking up the pace when it comes to forward planning their activity (a habit we saw born post-lockdown), with 2023's Christmas interest seeing some serious green shoots,” says Katie Kirwan, head of brand and B2C at DesignMyNight.
“There's already been a 20% growth in DesignMyNight's audience looking for Christmas dinner locations, with a 364% year-on-year increase in searches for Christmas party venues in London specifically. And as for our most booked day in December so far? It's neck and neck between the 9th, and of all days, Christmas day itself.”
Meanwhile, Henry Seddon, managing director of technology specialist Access Hospitality, says that bookings start picking up as people return from summer holidays.
He advises licensees to promote pre-orders and streamlined payments to tap into the increasing demand from customers who are looking for convenience and ease. He also agrees that ticketed events that drive demand are particularly important in leveraging the excitement around specific calendar dates such as New Year’s Eve.
“We have seen an increase in reservations made in advance over the last year, as consumers want greater certainty about their plans, and this enables hospitality operators to plan ahead in terms of their food and drink offer, staffing and driving revenue,” he says.
Planning ahead and making sure that Christmas has the chance to be a strong trading month is crucial for pubs. While it is a challenging market – it is also the season to be jolly – and consumers while cautious still want to have a good time.