Pubs urged to emulate high street restaurants to combat falling drink sales

21 March 2012 by
Pubs urged to emulate high street restaurants to combat falling drink sales

Pubs need to emulate successful high street restaurant operations, as they combat falling drinks sales.

That's the message from Peter Backman, managing director of food service consultancy Horizons, as he spoke to an audience at the Travel & Leisure Conference, organised by investment bank Numis Securities in London earlier today.

Backman said that while the pub food market was heading for saturation, there were still growth opportunities in the UK for mid-market, quick service and casual dining restaurants serving cheaper food, more quickly.

"Brands such as Wagamama and Nando's are those operating in the casual dining sector. These operators are profitable because of their fast turnover and high footfall, while cash-pressed customers are attracted by their value-conscious, reliable food. This is the market pubs need to emulate, where there is still opportunity for growth," he said.

"The big pub operators, such as Marston's, Greene King, JD Wetherspoon and Mitchells & Butlers, all now report food as over 40% of sales. However, food in pubs has lower margins than drink sales because of the higher cost of producing meals, consequently either pub food businesses need to charge more for their food, or the food model in pubs needs to change."

"There are areas of the eating out market in the UK that are under-represented - it's about rethinking operational style and meeting the requirements of the new budget-conscious consumer. It makes sense for pubs to do the same.

On the high street, brands such as Giraffe and and PizzaExpress have continued to see strong sales throughout the recession.

"The benefit of these brands is that many customers prefer their faster service, cheaper food and familiar menus, and because of this, operators are able to turn their tables more rapidly. I believe this is the market that pubs would be well served to explore," Backman said.

By Neil Gerrard

E-mail your comments to Neil Gerrard here.

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