Recent restaurant sector difficulties have been well-publicised with several high-profile Company Voluntary Arrangements (CVAs) leaving some questioning why pubs have not suffered a similar fate.
Many of the cost headwinds faced in the restaurant sector, such as increasing business rates, the national living wage, general cost inflation and recruitment issues, have been equally painful for pubs, so why have we not seen operators forced to restructure?
A key difference is that the pub sector has not seen the same vast number of new openings as the restaurant market in recent years. On the high street, where pubs suffered from lack of investment for several years, new capital is being injected by existing operators while newer entrants such as Loungers, BrewDog, New World Pub Company and Brewhouse & Kitchen offer something different.
Additionally, pub refurbishments, which are often carried out on existing businesses, are typically cheaper than opening a new restaurant from scratch.
Rising demand for premium drinks, spirits and craft beers has been great for the pub sector and given many smaller venues which are less suited to offering food a new lease of life.
Similarly, there has been a resurgence of sports bar concepts, fuelled by the increased popularity of boxing, American football and other sports beyond traditional football. This is highlighted by Stonegate’s acquisition of the Sports Bar & Grill chain and new high-end venues such as ETM Group’s premium sports lounge Greenwood in London’s Victoria.
Pubs are often on larger plots, allowing operators to be more innovative with external areas and create fantastic additional trading spaces for use year round. More than ever consumers are seeking an independent feel to the venues where they choose to eat and drink, and pub operators can easily adapt to this by trading venues under their original pub name.
As long as operators continue to evolve their trading concepts and show a willingness to invest in venues to keep them fresh, there is no reason why pubs will not continue to perform well.
• This content first appeared in The Morning Advertiser.
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