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Pub Catering - UK - May 2016

“The pub catering market is highly competitive, as evidenced by the continuing decline in pub numbers. Pubs also compete with a range of other eating out establishments, so food needs to compare favourably with restaurants if they are to increase the frequency of visits. Food is a core part of pubs’ sales mix and all-day food sales continue to provide growth opportunities. This includes a strong breakfast/brunch offer, afternoon teas and more light snacks to maximise revenues.”
– Richard Caines, Senior Food Analyst

This report discusses the following key topics:

  • Pubs must focus on an all-day food offer and celebrations to maximise revenues
  • More build-your-own dishes and daily specials can increase the appeal of pub menus
  • Personalised loyalty rewards offered by digital schemes will help build engagement

The number of pubs has been declining, with those that relied on sales of alcoholic and soft drinks more likely to have disappeared. While a greater focus on food has proven to protect many venues, the eating out market is extremely competitive and pubs are not just competing against one another but also against a range of other eating out establishments. This means there is a need for a strong food offer that compares favourably with restaurants for quality and value.

To maximise sales more, pubs are now going beyond the peak lunchtime and evening trade and introducing breakfast/brunch menus, as well as a stronger hot drinks and snacks offer throughout the day. With so much competition, continuing menu development and regular offers remain vital, as does good customer service and increasing engagement with pub visitors using both traditional and digital marketing activity.

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Table of contents

  1. Introduction

    • What you need to know
      • Definition
      • Executive Summary

          • Further growth in pub catering sales expected
            • Figure 1: Best- and worst-case forecast for pub catering market, 2010-20
          • Real wage growth but not a lot of money left for dining out
            • Competition in the eating out market
              • Potential for encouraging more frequent pub visits
                • Figure 2: Frequency of visiting a pub/bar to eat or drink, by time of day, March 2016
              • Maximising all-day food sales at pubs
                • Interest in more daily specials and locally-sourced ingredients
                  • Figure 3: Factors that would encourage people to choose one pub/bar over another, March 2016
                • Preference for traditional British dishes
                  • Figure 4: Food and menu preferences when going to a pub/bar for something to eat, March 2016
                • Strong interest in personalisation and food tasting
                  • Figure 5: Interest in introduction of different features at pubs/bars where people eat, March 2016
                • Websites and social media influencing choice
                  • Figure 6: Consumer behaviour and interaction with pubs/bars, March 2016
                • What we think
                • Issues and Insights

                  • Pubs must focus on an all-day food offer and celebrations to maximise revenues
                    • Facts
                      • Implications
                        • More build-your-own dishes and daily specials can increase the appeal of pub menus
                          • Facts
                            • Implications
                              • Personalised loyalty rewards offered by digital schemes will help build engagement
                                • Facts
                                  • Implications
                                  • The Market – What You Need to Know

                                    • Sales of food through pubs increases by 2%
                                      • More all-day food offers should boost growth
                                        • Real wage growth means more money for dining out
                                          • But most people still have little spare cash
                                            • Intense competition in eating out market
                                              • Population growth to boost pub catering sales
                                                • Need to encourage more visits by 25-44-year-olds
                                                • Market Size and Forecast

                                                  • Pub catering sales grow to £7.2 billion
                                                    • Figure 7: Pub catering market size and forecast, 2010-20
                                                  • All-day food offer will help drive growth
                                                      • Figure 8: Best- and worst-case forecast for pub catering market, 2010-20
                                                  • Market Drivers

                                                    • A third of people spend extra money on dining out
                                                      • Figure 9: Trends in share of consumers who choose to spend their extra* money on dining out, November 2009-April 2016
                                                    • Most people have limited budgets for eating out at pubs
                                                      • Figure 10: Trends in how respondents would describe their financial situation, February 2009-March 2015
                                                    • Introduction of national living wage will add to pub costs
                                                      • Taxation burden of the pubs sector
                                                        • Declining alcohol consumption puts increased focus on food sales
                                                          • Competition from cafés and restaurants
                                                            • Population growth to benefit pub catering sales
                                                              • Figure 11: Trends in the age structure of the UK population, 2010-20
                                                            • 2016 summer of events can help to increase pub food sales
                                                            • Key Players – What You Need to Know

                                                              • Spirit Pub Company boosts Greene King’s pub food share
                                                                • Pub chains increasingly catering for all-day demand
                                                                  • More menu options for children and vegetarians
                                                                    • Digital marketing initiatives looking to increase engagement
                                                                      • Good value and service drive visits to JD Wetherspoon
                                                                        • Harvester seen as a trusted, family-friendly brand
                                                                          • Beefeater Grill needs to increase customer engagement
                                                                          • Companies and Recent Developments

                                                                              • Greene King
                                                                                • Structure
                                                                                  • Brands
                                                                                    • Positioning
                                                                                      • Recent activity
                                                                                        • Financial data
                                                                                          • Figure 12: Key financial data for Greene King Plc, 2011-15
                                                                                          • Figure 13: Greene King PLC revenue, by segment, 2012-15*
                                                                                        • Recent marketing, promotions and media
                                                                                          • Menu developments
                                                                                            • JD Wetherspoon
                                                                                              • Recent activity
                                                                                                • Financial data
                                                                                                  • Figure 14: Key financial data for JD Wetherspoon PLC, 2012-15
                                                                                                • Recent marketing, promotions and media
                                                                                                  • Menu developments
                                                                                                    • Mitchells & Butlers (M&B)
                                                                                                      • Brands
                                                                                                        • Strategy
                                                                                                          • Recent activity
                                                                                                            • Financial developments
                                                                                                              • Figure 15: Key financial data for Mitchells and Butlers Plc, 2012-15
                                                                                                            • Recent marketing, promotions and media
                                                                                                              • Menu developments
                                                                                                                • Stonegate Pub Company
                                                                                                                  • Brands
                                                                                                                    • Recent activity
                                                                                                                      • Financial data
                                                                                                                        • Figure 16: Key financial data for Stonegate Pub Company, 2011-14
                                                                                                                      • Recent marketing, promotions and media
                                                                                                                        • Menu developments
                                                                                                                          • Whitbread
                                                                                                                            • Brands
                                                                                                                              • Recent activity
                                                                                                                                • Financial activity
                                                                                                                                  • Figure 17: Key financial data for Whitbread Plc, 2011-15
                                                                                                                                • Recent marketing, promotions and media
                                                                                                                                  • Menu development
                                                                                                                                  • Brand Research

                                                                                                                                      • What you need to know
                                                                                                                                        • Brand map
                                                                                                                                          • Figure 18: Attitudes towards and usage of selected brands, March 2016
                                                                                                                                        • Key brand metrics
                                                                                                                                          • Figure 19: Key metrics for selected brands, March 2016
                                                                                                                                        • Brand attitudes: JD Wetherspoon deemed the best value pub brand
                                                                                                                                          • Figure 20: Attitudes, by brand, March 2016
                                                                                                                                        • Brand personality: Beefeater Grill needs to engage more to boost image
                                                                                                                                          • Figure 21: Brand personality – Macro image, March 2016
                                                                                                                                        • Toby Carvery and Harvester have strong family associations
                                                                                                                                          • Figure 22: Brand personality – Micro image, March 2016
                                                                                                                                        • Brand analysis
                                                                                                                                          • JD Wetherspoon the most visited pub chain
                                                                                                                                            • Figure 23: User profile of JD Wetherspoon, March 2016
                                                                                                                                          • Toby Carvery has reputation for consistent quality
                                                                                                                                            • Figure 24: User profile of Toby Carvery, March 2016
                                                                                                                                          • Hungry Horse has strong association with being a fun brand
                                                                                                                                            • Figure 25: User profile of Hungry Horse, March 2016
                                                                                                                                          • Harvester seen as a trusted and friendly family brand
                                                                                                                                            • Figure 26: User profile of Harvester, March 2016
                                                                                                                                          • Slug & Lettuce less accessible than other brands
                                                                                                                                            • Figure 27: User profile of Slug and Lettuce, March 2016
                                                                                                                                          • Beefeater Grill has lowest levels of satisfaction
                                                                                                                                            • Figure 28: User profile of Beefeater Grill, March 2016
                                                                                                                                        • The Consumer – What You Need to Know

                                                                                                                                          • Room to increase frequency of eating out at pubs
                                                                                                                                            • Pubs looking to maximise all-day food sales
                                                                                                                                              • Strong demand for more daily specials and local produce
                                                                                                                                                • Loyalty scheme rewards can help drive repeat visits
                                                                                                                                                  • Stronger preference for traditional British dishes at pubs
                                                                                                                                                    • Offering a mix of healthy and more indulgent dishes
                                                                                                                                                      • Table service preferred but also role for technology
                                                                                                                                                        • Personalisation of dishes and food tasting popular
                                                                                                                                                          • Online menus and reviews a big influence on choice
                                                                                                                                                          • Frequency of Visiting Pubs/Bars

                                                                                                                                                            • More people visit pubs to eat in than drink in
                                                                                                                                                              • Figure 29: Visiting a pub/bar to eat or drink, by time of day, March 2016
                                                                                                                                                            • Room to encourage more frequent eating in pubs
                                                                                                                                                              • Figure 30: Frequency of visiting a pub/bar to eat or drink, by time of day, March 2016
                                                                                                                                                            • Town/city pub menus need to appeal to younger population
                                                                                                                                                              • Figure 31: Visiting a pub/bar to eat at least once a week, by age and type of location where person lives, March 2016
                                                                                                                                                          • Mealtimes and Occasions for Eating in Pubs/Bars

                                                                                                                                                            • Evening trade most important to pub catering sales
                                                                                                                                                              • Figure 32: Mealtimes at which people visit a pub/bar for something to eat, March 2016
                                                                                                                                                            • Pubs look to gain share of breakfast trade
                                                                                                                                                              • Afternoon tea can also boost sales outside main meal times
                                                                                                                                                                • Six in ten visit pubs for special occasions
                                                                                                                                                                  • Figure 33: Occasions people typically visit a pub/bar for something to eat, March 2016
                                                                                                                                                                • Themed nights and food festivals can give reasons to visit
                                                                                                                                                                • Factors Influencing Choice of Pub for Eating

                                                                                                                                                                  • Strong demand for more daily specials and locally-sourced ingredients
                                                                                                                                                                    • Daily specials can imply freshness
                                                                                                                                                                      • Tapping the Locavore trend
                                                                                                                                                                        • Meat-free meals appeal beyond vegetarians
                                                                                                                                                                          • Figure 34: Factors that would encourage people to choose one pub/bar over another when eating, March 2016
                                                                                                                                                                        • Themed events can add something different to pub catering
                                                                                                                                                                          • Themed nights appeal to one in five
                                                                                                                                                                            • Time-limited nature of special event menus offers a prompt
                                                                                                                                                                              • Men want festivals, women go for special menus
                                                                                                                                                                                • Customer loyalty schemes offer ways to engage
                                                                                                                                                                                  • Only one in four people has healthy finances
                                                                                                                                                                                    • Loyalty schemes enable targeted promotions
                                                                                                                                                                                      • Children’s menus make a difference to family dining
                                                                                                                                                                                      • Pub Eating Preferences

                                                                                                                                                                                        • Traditional British dishes preferred to modern fare
                                                                                                                                                                                          • Figure 35: Food and menu preferences when going to a pub/bar for something to eat, March 2016
                                                                                                                                                                                        • Seasonal menus add variety to the pub food offer
                                                                                                                                                                                          • Menu needs to feature both healthy and more indulgent dishes
                                                                                                                                                                                            • More prefer table service than ordering and paying at the bar
                                                                                                                                                                                              • Set-price menus appeal to over-65s
                                                                                                                                                                                                • Figure 36: Type of menu and service preferences when going to a pub/bar for something to eat, March 2016
                                                                                                                                                                                            • Interest in Features of Pub Catering

                                                                                                                                                                                              • Customisation proves popular
                                                                                                                                                                                                • Trying new dishes would appeal to one in three
                                                                                                                                                                                                  • Figure 37: Diners’ interest in new features at pubs/bars, March 2016
                                                                                                                                                                                                • Loyalty schemes can build relevance by tracking orders
                                                                                                                                                                                                  • Technology can help to improve customer service
                                                                                                                                                                                                    • A quarter of diners are interested in pre-ordering
                                                                                                                                                                                                      • Electronic ordering welcomed by many
                                                                                                                                                                                                      • Consumer Behaviour and Interaction with Pubs/Bars

                                                                                                                                                                                                        • Menus on websites and good online reviews important
                                                                                                                                                                                                          • E-mail promotions enjoy widespread use
                                                                                                                                                                                                              • Figure 38: Consumer behaviour and interaction with pubs/bars, March 2016
                                                                                                                                                                                                            • Building pub catering sales using social media
                                                                                                                                                                                                              • Good customer service essential to pub food trade
                                                                                                                                                                                                                • Pubs competing with coffee shops for hot drink sales
                                                                                                                                                                                                                • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                                    • Abbreviations
                                                                                                                                                                                                                      • Fan chart forecast
                                                                                                                                                                                                                      • Appendix – The Market

                                                                                                                                                                                                                          • Figure 39: Best- and worst-case forecast of total UK pub catering sales, 2010-20

                                                                                                                                                                                                                      Companies Covered

                                                                                                                                                                                                                      • Beefeater
                                                                                                                                                                                                                      • Belhaven Brewery Company Ltd.
                                                                                                                                                                                                                      • Costa
                                                                                                                                                                                                                      • Greene King Brewing and Retailing Ltd
                                                                                                                                                                                                                      • Hungry Horse
                                                                                                                                                                                                                      • JD Wetherspoon
                                                                                                                                                                                                                      • Loch Fyne Restaurants Ltd
                                                                                                                                                                                                                      • London Stock Exchange plc
                                                                                                                                                                                                                      • Mitchells & Butlers Plc
                                                                                                                                                                                                                      • Stonegate Pub Company
                                                                                                                                                                                                                      • Whitbread PLC

                                                                                                                                                                                                                      Pub Catering - UK - May 2016

                                                                                                                                                                                                                      £1,995.00 (Excl.Tax)