The Professional's Voice

Growth Monitor – branded food pubs and casual dining in growth, overall numbers fall back

Britain’s supply of licensed premises has been pared back this year – but casual dining restaurants and branded food pubs have remained firmly in growth.

The latest Market Growth Monitor, the quarterly measure of British pub, bar and restaurant openings and closures produced by AlixPartners and CGA Peach, showed the number of licensed premises fell 1.2% in the 12 months to September this year, to a little under 123,000.

According to the report, much of this net decline can be put down to the continued demise of old-fashioned, drink-led pubs and also traditional independent restaurants.

Also, the Brexit vote has affected business confidence in the sector, as CGA research has shown, and there is evidence pub and restaurant groups have become more cautious, pulling back on some more ambitious expansion plans as well as taking a tougher approach to underperforming sites.

“Nevertheless, competition in the managed chain restaurant and food pub market remains fierce and the sector continues to grow in numbers – particularly in our major cities,” said CGA Peach vice-president Peter Martin.

“It is also worth noting that sites being opened tend to be much larger than the establishments being closed – leading to a net increase in trading space.”

The report showed while the number of drink-led licensed premises fell by 2.1% in the past 12 months, largely due to the closures of community locals and circuit bar, the total of food-led premises slipped only 0.4%.

Martin added: “Within this segment, closures have tended to be of independent outlets, with a particular skew towards Indian or Chinese restaurants. The rising popularity of takeaways and delivery, through intermediaries like JustEat and Hungry House, has been a major pressure here. But even more significant has been the intense competition from still growing casual dining brands.”

AlixPartners managing director Paul Hemming added: “Parts of the market are still witnessing significant growth – the numbers of managed restaurants in the UK has grown by 4.9% in the 12 months to September alone. The roll-out of high quality branded concepts, and those run by fledgling, entrepreneurial operators in particular, is the central narrative of the story in eating out.”

Also striking was the continued rise of branded food pubs, whose numbers grew by 19.1% in the year to September, equivalent to more than one new addition a day. Some of these have been new openings, but many more are conversions of previously unbranded pubs to formats under the control of major pub groups such as Mitchells & Butlers and Greene King. The number of branded food pubs has leapt by nearly half (45.7%) in the past five years.

Martin said: “The fortunes of pubs and bars that are led by drink, down by 18.1% in five years, make for a stark contrast. The collapse of suburban and rural drinking pubs is a thread that the media likes to follow, but the success of pub restaurants is a hugely positive one that tends to be overlooked.”

Hemming added: “The changing face of the British pub has helped to create an opportunity for operators across the pub spectrum, be it the larger pubcos converting suboptimal wet-led units to food or the new wave of premium concepts such as White Brasserie Company, Hippo Inns and Seafood Pub Company, the success of which suggest the pub is an increasingly attractive home for restaurant operators, often engendering markedly higher customer satisfaction ratings relative to restaurants.”

These quarterly trends of rising pub and restaurant brands and falling independents and drinking pubs have been consistent across the country. They were also strikingly similar when split by locations like the high street (where the number of licensed premises is down 1.1%), the suburbs (down 1.4%) and rural areas (down 1.0%).


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