Pub Visiting - UK - May 2019

OVERVIEW
What you need to know
Products covered in this Report
EXECUTIVE SUMMARY
The market
Revenues rise over 2014-18 despite falling numbers of pubs
Slow growth expected for 2019-23
Figure 1: Forecast of total UK pub industry revenues, 2013-23
Weather extremes of 2018 impact the pub sector
Rising costs for the pub industry
Companies and brands
Sales growth for both managed and tenanted/leased sectors in 2018
Experiential activities and new technology boost leading pub companies
Pub chains diversify their food and drink offering
Pub companies continue with ethical initiatives
The consumer
Nine in 10 adults visit pubs or bars
Figure 2: Pub/bar/nightclub visiting, by time of day, March 2019
Comforts of home trump pubs/bars for half of non-/infrequent visitors
Figure 3: Barriers to visiting pubs and bars, March 2019
Pubs lead on informal occasions but lose out for celebrations
Locally-sourced food and drink appeals to many
Figure 4: Interest in products and services in pubs and bars, March 2019
Recommendations prompt visits
Figure 5: Behaviours related to pub and bar visiting, March 2019
What we think
ISSUES AND INSIGHTS
Consumers’ price consciousness sets pubs/bars a challenge
The facts
The implications
Locally sourced food and drink appeals to many
The facts
The implications
Technological innovations can bring advantages, but must not overshadow the social aspects of pubs/bars
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Revenues rise over 2014-18 despite falling numbers of pubs
Slow growth expected for 2019-23
Weather extremes of 2018 impact the pub sector
Rising costs for the pub industry
MARKET SIZE AND FORECAST
Revenues rise over 2013-18 despite falling numbers of pubs
Figure 6: UK pub industry market size and forecast, 2013-23
Slow growth predicted for 2019-23
Further rises in costs are on the cards for the pub industry
Alcohol moderation trend to hinder alcoholic drinks sales
Modest growth expected for food and entertainment
Ageing UK population to hamper sales in pubs
Figure 7: Forecast of total UK pub industry revenues, 2013-23
Forecast methodology
MARKET SEGMENTATION
Pub turnover rises in 2018
Figure 8: Estimated UK pub industry turnover, by segment, 2014-18
Cold weather in early 2018 proves a setback for pubs
Hot summer boosts drinks more than food
Success for pub accommodation and entertainment
MARKET DRIVERS
Pub closures continue
Rural pubs get government funding to run extra services
Rising costs for the pub industry
Alcohol duties freeze offers relief to the pub industry
Business tax rates rise in 2019
Government re-evaluates pubs’ rateable value
Rise in the Living Wage raises staff costs for pubs
Future state of the economy is crucial for the pub sector
Multiple uncertainties continue to surround Brexit
Ageing UK population offers little support for pubs
Alcohol moderation trend sets challenge for pubs
Weather extremes of 2018 prove a problem and a benefit for pubs
Figure 9: Sunshine hours in the UK, by month, 2013-18
CO2 shortage does little to dampen pub drinks sales
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Sales growth for both managed and tenanted/leased sectors in 2018
Experiential activities and new technology boost leading pub companies
Pub chains diversify their food and drink offering
Pub companies continue with ethical initiatives
PERFORMANCE OF SELECTED LEADING COMPANIES
Sales growth for both managed and tenanted/leased pubs in 2018
Some operators grow sales despite reduced outlet numbers
Figure 10: Turnover of selected leading managed pub operators in the UK, 2013/14-2017/18
Figure 11: Turnover of selected leading managed pub operators in the UK, 2013/14-2017/18
Number of tenanted/leased pubs falls in 2018
Figure 12: Selected leading pub operators in the UK, by outlet numbers, 2014-18
Increased experiential activities boost Ei Group
Figure 13: Key financial data for Ei Group (formerly Enterprise Inns), 2014-18
Greene King receives value sales boost from the craft trend
Figure 14: Key financial data for Greene King, 2014-18
JD Wetherspoon credits ordering app for sales growth
Figure 15: Key financial data for JD Wetherspoon, 2014-18
Mixed results for Mitchells & Butlers brands
Figure 16: Key financial data for Mitchells and Butlers, 2014-18
Punch Taverns returns to profits
Figure 17: Key financial data for Punch Taverns, 2014-18
RECENT ACTIVITY AND INNOVATION
Pub chains expand their drinks ranges
JD Wetherspoon continues to support craft spirits…
….and moves to replace European alcohol brands with non-EU alternatives
Greene King introduces kombucha in its London pubs
Ei Group supports low-/no-alcohol beers in January promotion
Pub chains and independents continue with ethical initiatives
Greene King looks to address food waste with new app…
…and links with Royal British Legion to mark the First World War centenary
Pub chains take action on plastic straws
Various pubs link with craft brewery to support homelessness charities
Wetherspoon targets students with discount voucher books
Samuel Smith’s imposes mobile phone ban
Pubs expand their vegan offering
Added vegetables trend extends into the pub sector
THE CONSUMER – WHAT YOU NEED TO KNOW
Nine in 10 adults visit pubs or bars
Comforts of home trump pubs/bars for half of non-/infrequent visitors
Pubs lead on informal occasions but lose out for celebrations
Locally-sourced food and drink appeals to many
Recommendations prompt visits
FREQUENCY OF VISITING PUBS AND BARS
Nine in 10 adults visit pubs or bars
Figure 18: Pub/bar/nightclub visiting, by time of day, March 2019
Pub visiting frequency is linked with financial health
Men drink at pubs more often than women
Most people visit pubs/bars only occasionally
Figure 19: Frequency of visiting pubs/bars, by time of day, March 2019
18-34s are the core pub/bar visitors
BARRIERS TO VISITING PUBS AND BARS 
Comforts of home are more compelling for half of non-/infrequent pub/bar visitors
Figure 20: Barriers to visiting pubs and bars, March 2019
Link-ups with home delivery and streaming services should benefit pub/bar operators
Noise levels in pubs are a major reason for people preferring to stay at home
‘Quiet zones’ appeal strongly to those who find pubs too noisy
Price considerations deter four in 10
Venue-exclusive drinks can help pubs to better compete with retail
Regularly rotating drinks lists should appeal especially to younger people
ON-TRADE VENUES FAVOURED FOR PARTICULAR OCCASIONS
Pubs are the go-to venue for drinks at all times of the week
More people choose pubs for drinks at weekends than weekdays
Figure 21: On-trade venues favoured for particular occasions, March 2019
Pubs lead when people want to relax
Pubs lag behind restaurants for celebrations
Pubs are the top choice for taking advantage of good weather
Need to remind people of pubs’/bars’ suitability for all weather conditions
INTEREST IN PRODUCTS AND SERVICES IN PUBS AND BARS
Locally-sourced food and drink appeals to just under half of patrons
Local sourcing can help to strengthen pubs’ image as supporting the local economy
Local sourcing can tempt people willing to go further afield
Figure 22: Interest in products and services in pubs and bars, March 2019
Trendy food and drink appeal especially to under-35s…
Sourcing ingredients for trendy dishes locally should boost appeal
…as do in-house alcoholic drinks
Interactive elements should help to build consumer engagement
In-house drinks team up well with locally-sourced food/drink
Technological innovations appeal particularly to under-35s and parents
Ordering apps offer advantages to both venues and customers…
…but pubs and bars must not neglect the social aspects
Foodservice sector offers potential cues on computers in venues
BEHAVIOURS RELATED TO PUB AND BAR VISITING
Recommendations prompt visits…
…and should be well-placed to persuade people to venture out of their local area
Figure 23: Behaviours related to pub and bar visiting, March 2019
Discount vouchers and shared knowledge marketing messages should help to incentivise recommendations
Six in 10 stick to the same brands in pubs and bars
Use staff recommendations to drive trial and add value
Look to harness the power of peer recommendations
Sampling opportunities should appeal
Opinions are divided on whether independent establishments offer better quality than pub chains
Younger people are especially likely to rate the quality of independent pubs
Focus on provenance should benefit both larger and smaller establishments
Price is a major influence on choice of pub
Local sourcing can help to appeal to those who are not influenced by price
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology
APPENDIX – MARKET SIZE AND FORECAST
Forecast methodology
Figure 24: Forecast of total UK pub industry revenues, 2018-23