The future for pubs is not entirely food-led despite grave warnings for drink-led establishments, according to the chief executive of the Capital Pub Company.
The implementation of the English smoking ban sparked widespread predictions of an entirely new customer base for UK pubs, with a good food offering seen as the key to survival.
But reporting strong financial results last week, Capital's David Bruce said the combination of higher margins on liquor sales and lower wage bills shows that drink-led pubs are still financially viable.
"Our margins on liquor are better than on food, and the reason we are making more profits is because we have better procurement," he said. "We have 60% gross profit on our liquor offering. We have doubled our barrelage and we have the central London location to display products that many suppliers are keen to have to get the business."
Bruce added that if all his pubs were food-led his wage bill would be approximately 30% of earnings per pub, but as liquor-led establishments that average could be pushed down to 20%. Capital's current split is 20% food sales and 80% drinks sales.
Capital, which floated on the Alternative Investment Market last month, runs 23 pubs, primarily in west and south London. Its turnover increased by 47% in the year ending 31 March, up from £9.66m to £14.2m, but pre-tax profits increased only marginally, from £1.17m to £1.65m, largely due to the £990,000 cost of flotation.