Is the end in sight for drink-led pubs and bars? Let’s get this straight right from the start—the simple and emphatic answer is no.
The reason this question is even being asked is down to the reaction in some quarters to the latest openings and closures figures in CGA Peach’s new Market Growth Monitor, produced in partnership with Alix Partners.
Yes, pubs are continuing to shut. There was a 4.4% decline in drink-led pubs and bars, including a 5.1% fall in community pub numbers, in the year to the end of June. That contrasts with the 6.9% growth in restaurant sites in the same period, equating to a net increase of 1,700 new restaurants—and most of them casual dining brands.
And yes, there are now more licensed restaurants in Great Britain than drink-led 'community locals'—27,500 against 26,700.
But that doesn’t mean, nor are we saying, that the trend will inevitably continue—as some seem to have construed. What the figures highlight is the continuing evolution of consumer tastes and habits—in particular the shift in consumer preferences towards eating-out occasions, or more pertinently to eating and drinking together.
Just as many pubs have successfully leveraged food to boost their sales, so casual dining chains are increasingly focusing on increasing their drinks mix—and more often around beer and cocktails, rather than wine. Admittedly starting from a low base, restaurants are now nonetheless showing some of the biggest increases in alcohol sales—something that has not escaped the notice of the big drinks companies.
The other positive effect of the expansion of casual dining is that it has actually helped stem the long-term decline in the total number of licensed premises in Britain. Over the last year, total numbers actually increased slightly by a net 965 to just over 124,000. In the previous five years, numbers had fallen by over 8,000.
So what then of the future for drink-led businesses—in other words those where drink makes up the majority of sales? Well it may depend on where you are. Urban areas have been the main focus for new site growth, seeing an overall 2.9% uplift in licensed premises in the year to June, and within that the numbers of drink-led businesses have remained largely static.
In fact, most of our big city centres—the likes of Manchester, Birmingham, Leicester, Newcastle, Sheffield, Bristol and Coventry—have seen net increases in bar openings this past year. They may not match up to the image of a traditional local, but they major on alcohol sales.
Our own industry sales barometer, the Coffer Peach Business Tracker, has consistently shown drink-led managed pubs in London producing some of the sector’s best like-for-like sales figures. Admittedly, a lot of that growth has come from a growing food mix, but that just emphasises the growing importance of balancing drink and food.
The fact that businesses that are fanatical about their food offerings like Drake & Morgan and Loungers are both drink-led businesses, by the industry definition, just underlines the point. Whether the distinction between being drink or food-focused remains relevant is, of course, another question. After all, for the consumer it’s all about the total experience.
But that still begs the question of whether you can still survive by just selling drink? The success of a bar chain like Be At One shows you can—if you are a real specialist, provide a very special experience and know how to excite your customers.
There may be more people who claim not to drink these days, but there are still plenty that do. But understanding how and when they want to relax with a glass of beer or wine or a cocktail is what’s important. It always comes down to the consumer.