Market snapshot: Pub food

04 July 2005
Market snapshot: Pub food

The market Pub food is now a £6b industry, according to market researcher Mintel. The average pub now gets more than 25% of its turnover from meals, and the number of pub diners has overtaken the number of pub drinkers, according to Mintel's survey of the pub catering market published last autumn.

Where "pub food" was once synonymous with steak and ale pies or microwaved lasagne, the quality and diversity of the food on offer has improved immeasurably over the past decade.

The rise of the gastro pub, led initially by pubs such as The Eagle in Farringdon and still predominantly in London, has also fuelled growth in the market.

The market is broadly split between chain pubs, where the menu is set but normally of fairly high quality and "traditional" pubs where the food might be more termed "pub grub" and is ordered at the bar, rather than of restaurant standard.

According to Mintel, the traditional pub sector is kept afloat by a core market of some seven million adults who say they prefer that type of food, particularly the perception they are getting more generous portions, rather than what is on offer in chain pubs.

Nevertheless, while quality has improved, there is still some way to go. The Which? Pub Guide, for instance, warned last September that pubs serving good food remain in the minority overall.

Growth prospects Sales of meals through pubs have increased by around £1b since 1999, according to Mintel, and the market shows no signs of tailing off.

The British public's appetite for eating out is undiminished, according to figures from the Office for National Statistics, with the hotel, catering and pub sector one of the fastest growing industries in the UK.

Spending on eating out and drinking has grown by 82% in the 10 years from 1992, it calculates.

Gastro pubs, with their emphasis on high-quality food, are increasingly moving out of their London heartland.

The Which? Pub guide identified 67 gastro pubs in London, up 17, with new arrivals opening in Manchester, Cardiff and Brighton.

As yet, though, many of the gastro pubs outside the capital have been concentrated in rural areas, argues Derek Bulmer, editor of the Michelin Eating Out in Pubs guide, particularly as more chefs become landlords.

This means there is still lots of potential for growth in urban centres, he suggests.

The banning of smoking, initially just away from the bar but eventually in all pubs, could also fuel growth in the market, if it attracts more non-smokers to come and eat.

Many pub chains, such as JD Wetherspoon and Laurel, are already going the route of banning smoking in their pubs, signalling that is where they see the future lying.

Fuller's has also said it will probably look at the business case for food over smoking at 10% of its 231-strong estate.

But there are contradictory signals here, too. In February, the Junction Inn in Groombridge, Kent, was forced to drop a ban on smoking at the bar after beer sales plummeted, even though it is a food-led pub.

And a report last autumn by accountancy firm BDO Stoy Hayward suggested many chains could also cut food sales to permit smoking.

Key trends
Along with the development of the gastro pub, one of the key trends of the past decade has been a gradual blurring of the lines between pub and restaurant food, in terms of quality of offering and service.

Table service, for instance, is growing in popularity and increasingly replacing bar meals and self-service menus. Some 38% of pubs that serve food are now estimated to offer table service, compared with 32% in 1999.

"Food has become a very significant focus in the past 10 years, it has been a real shift," says Which? Guide editor Andrew Turvil.

The difficulty has been how to improve the quality of what is on offer while not losing the traditional "pubiness", he suggests.

"A lot of pubs have converted into smarter, higher-end venues, particularly in the big cities, but a lot of people still like the idea of being able to order food from the bar and then have it brought to their table," he adds.

There has also been a trend for pubs to have separate restaurant-style dining rooms. "I walked into a pub a while ago, just wanting to buy a pint, and was shocked to be asked whether I had booked. So there is an issue of whether drinkers are being marginalised," says Turvil.

Improving food standards have not only been confined to urban pubs. Changes attitudes and expectations have driven this change, argues Derek Bulmer, editor of the Michelin Eating Out in Pubs guide.

"The drink-driving laws have made it much harder for rural pubs to survive on wet sales alone. Food has been the obvious way to go," he says.

Future prospects Pubs will increasingly start to give chain restaurants a run for their money as an eating-out destinations, predicts Turvil.

"On every high-street or town centre there are a lot of these old faces," he predicts. "If pubs start to offer customers daily menus based around fresh food or rooted in their region, then I think they will start to challenge the mass catering chains."

Banning smoking is likely to have an effect, but, with many chains already moving that way, is unlikely to have a marked impact going forward, Turvil suggests.

What is likely is that the sector will see an increasing polarisation in the sort of clientele pubs are aiming for, whether it be traditional drinkers, young drinkers or becoming family oriented.

"I think pubs will start to fall into different categories. People will know certain pubs are essentially 'dining pubs' and not really somewhere where you go just to have a drink. The definition of what is a pub is changing," says Bulmer.

Average price of pub meal £4.69£4.69£4.70
Average mark-up (ratio of food costs to total cost of meal)
Number of meals served (million)1,064 1,0701,081
Value of food purchases (£m)1,144 1,151 - 1,163


Source: Horizons/BHA Trends and Statistics 2004

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