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Pub Visiting - UK - May 2017

“Continuing to grow sales will be particularly important to pub operators in order just to stand still in terms of profits, given increased operating costs in 2017. Household budgets also look likely to be squeezed during 2017 by rising inflation, impacting on discretionary spending in pubs. This will all make it difficult for pubs to increase sales and maintain profitability without raising prices in some areas.”
– Richard Caines, Senior Food & Drink Analyst

This Report discusses the following key topics:

  • Increasing costs mean pubs need to find ways to grow sales just to stand still on profits
  • Flexible use of space and zoning needed to maximise appeal of pubs
  • Digital technology has an important role to play in driving pub visits

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Pubs benefit from strength of eating out market
              • Figure 1: Forecast for total UK pub industry revenues, 2011-21
            • Consumers opting for quality over quantity in alcoholic drinks
              • Figure 2: Forecast for UK pub industry revenues of alcoholic drinks, 2011-21
            • Pub meals benefit from move towards more food-led venues
              • Pubs need to grow sales in the face of rising costs
                • Brexit uncertainty and rising costs
                  • Consumers cutting back on alcohol
                    • Companies and brands
                      • Managed pubs boosting pub sales
                        • Enterprise Inns becomes Ei Group
                          • Greene King concentrating on conversions to five growth brands
                            • Weatherspoon rolls out new ordering phone app
                              • Mitchells and Butlers accelerates capital investment
                                • Punch backs takeover bid by Heineken and Patron Capital
                                  • The consumer
                                    • More than nine in ten Brits go to pubs/bars
                                      • Figure 3: Frequency of visiting pubs/bars/nightclubs to eat and drink in, March 2017
                                    • Three in ten adults cutting back on pub visits
                                      • Weekends the most popular time for visiting
                                        • Figure 4: Reasons for going to pubs/bars, March 2017
                                      • High quality food most important to pub choice
                                        • Figure 5: Factors most likely to influence choice of pub/bar, March 2017
                                      • Strong demand for quiet areas in pubs
                                        • Figure 6: Attitudes towards pubs/bars, March 2017
                                      • What we think
                                      • Issues and Insights

                                        • Increasing costs mean pubs need to find ways to grow sales just to stand still on profits
                                          • The facts
                                            • The implications
                                              • Flexible use of space and zoning needed to maximise appeal of pubs
                                                • The facts
                                                  • The implications
                                                    • Digital technology has an important role to play in driving pub visits
                                                      • The facts
                                                        • The implications
                                                        • The Market – What You Need to Know

                                                          • Pubs benefit from strength of eating out market
                                                            • Consumers opting for quality over quantity in alcoholic drinks
                                                              • Pub meals benefit from move towards more food-led venues
                                                                • Pubs need to grow sales in face of rising costs
                                                                  • Managed pubs boosting total pub sales
                                                                    • Brexit uncertainty but consumer confidence holding up so far
                                                                      • Rising costs on the cards for pub operators in 2017
                                                                        • Soft drinks levy coming in 2018
                                                                          • Consumers cutting back on alcohol
                                                                            • Pubs have less appeal to ageing population
                                                                            • Market Size and Forecast

                                                                              • Pub sector benefits from strength of eating out market
                                                                                  • Figure 7: UK pub industry market size and forecast, 2011-21
                                                                                • Consumers opting for quality over quantity in alcoholic drinks
                                                                                  • Figure 8: Estimated UK pub industry turnover, by segment, 2012-16
                                                                                • Pub meals account for nearly a third of pub sales
                                                                                  • Stronger sales of soft drinks through pubs/bars
                                                                                    • Increasing costs mean pubs need to grow sales to stand still
                                                                                      • Figure 9: Forecast for total UK pub industry revenues, 2011-21
                                                                                      • Figure 10: Forecast for UK pub industry revenues of alcoholic drinks, 2011-21
                                                                                    • Forecast methodology
                                                                                    • Segment Performance

                                                                                      • Managed pubs boosting total pub sales
                                                                                        • Figure 11: Turnover of selected leading pub operators in the UK, 2011/12-2015/16
                                                                                      • Move away from tenanted and leased pubs
                                                                                        • Free houses also an important part of the market
                                                                                        • Market Drivers

                                                                                          • Brexit uncertainty for pubs sector
                                                                                            • Confidence holding up but income squeeze on the way
                                                                                              • Figure 12: Trends in how respondents would describe their financial situation, February 2009-February 2017
                                                                                            • Rising costs on the cards for pub operators in 2017
                                                                                              • National Living Wage and National Minimum Wage
                                                                                                • Apprenticeship Levy
                                                                                                  • Revaluation of business rates
                                                                                                    • Alcohol excise duties increase by RPI inflation
                                                                                                      • Rising inflation puts further pressure on pubs
                                                                                                        • New Pubs Code for tied leased and tenancy agreements
                                                                                                          • Lords call for licensing committees and late-night levies to be scrapped
                                                                                                            • Soft drinks levy coming in 2018
                                                                                                              • New alcohol guidelines and cutting back on alcohol
                                                                                                                • Pubs have less appeal to ageing population
                                                                                                                  • Figure 13: Trends in the age structure of the UK population, 2011-21
                                                                                                              • Companies and Brands – What You Need to Know

                                                                                                                • Shift towards more managed pubs
                                                                                                                  • Enterprise Inns becomes Ei Group
                                                                                                                    • Greene King converting pubs to growth brands
                                                                                                                      • Weatherspoon rolls out new ordering phone app
                                                                                                                        • Mitchells and Butlers accelerates capital investment
                                                                                                                          • Punch backs takeover bid by Heineken and Patron Capital
                                                                                                                          • Selected Leading Companies

                                                                                                                              • Market overview
                                                                                                                                • Figure 14: Selected leading pub operators in the UK, by outlet numbers, 2012-16
                                                                                                                              • Ei Group Plc (formerly Enterprise Inns)
                                                                                                                                • Financial performance
                                                                                                                                  • Figure 15: Key financial data for Enterprise Inns Plc, 2012-16
                                                                                                                                  • Figure 16: Enterprise Inns Plc turnover, by segment, 2012-16
                                                                                                                                • Selected recent activity and innovation
                                                                                                                                  • Greene King Plc
                                                                                                                                    • Financial performance
                                                                                                                                      • Figure 17: Key financial data for Greene King Plc, 2012-16*
                                                                                                                                      • Figure 18: Greene King Plc revenue, by segment, 2012-16*
                                                                                                                                      • Figure 19: Segmental information for Greene King and Spirit Pub Company, 2016
                                                                                                                                    • Selected recent activity and innovation
                                                                                                                                      • JD Wetherspoon Plc
                                                                                                                                        • Financial performance
                                                                                                                                          • Figure 20: Key financial data for JD Wetherspoon Plc, 2012-16
                                                                                                                                        • Selected recent activity and innovation
                                                                                                                                          • Mitchells & Butlers Plc
                                                                                                                                            • Financial performance
                                                                                                                                              • Figure 21: Key financial data for Mitchells & Butlers Plc, 2012-16
                                                                                                                                            • Selected recent activity and innovation
                                                                                                                                              • Punch Taverns
                                                                                                                                                • Financial performance
                                                                                                                                                  • Figure 22: Key financial data for Punch Taverns Plc, 2012-16
                                                                                                                                                  • Figure 23: Punch Taverns Plc revenue, by segment, 2012-16
                                                                                                                                                • Selected recent activity and innovation
                                                                                                                                                • The Consumer – What You Need to Know

                                                                                                                                                  • More than nine in ten Brits visit pubs/bars
                                                                                                                                                    • Majority of people visit pubs to eat infrequently
                                                                                                                                                      • Three in ten adults cutting back on pub visits
                                                                                                                                                        • Weekends the most popular time for visiting
                                                                                                                                                          • Entertainment can also help generate footfall
                                                                                                                                                            • High quality food most important
                                                                                                                                                              • Customer service can make a difference
                                                                                                                                                                • Strong demand for quiet areas in pubs
                                                                                                                                                                  • Digital and social media important communication tools
                                                                                                                                                                  • Frequency of Visiting Pubs/Bars

                                                                                                                                                                    • More than nine in ten Brits go to pubs/bars
                                                                                                                                                                      • Figure 24: Visiting pubs/bars to eat or drink in, by time of day, March 2017
                                                                                                                                                                    • Majority of people only visit pubs/bars to eat infrequently
                                                                                                                                                                      • Younger age groups are core pub diners
                                                                                                                                                                        • Over-55s visit more during the day
                                                                                                                                                                          • Figure 25: Frequency of visiting pubs/bars/nightclubs to eat and drink in, March 2017
                                                                                                                                                                        • More frequent drinking in pubs shows younger, male bias
                                                                                                                                                                          • Figure 26: Drink-led visits to pubs/bars more than once a month during the day and in the evening, by gender and age, March 2017
                                                                                                                                                                      • Changes to Pub Visiting and Average Spend per Visit

                                                                                                                                                                        • Three in ten adults cutting back on pub visits
                                                                                                                                                                          • Figure 27: Changes in frequency of visiting pubs/bars compared to 12 months ago, March 2017
                                                                                                                                                                        • 18-24s and top income households most likely to have upped visits
                                                                                                                                                                          • Spending per visit shows less change
                                                                                                                                                                            • 18-24s most likely to have upped pub/bar spend
                                                                                                                                                                              • Figure 28: Changes in average spending per pub visit compared to 12 months ago, March 2017
                                                                                                                                                                          • Reasons for Visiting Pubs/Bars

                                                                                                                                                                            • Weekends are the most popular time for visiting
                                                                                                                                                                              • Figure 29: Reasons for going to pubs/bars, March 2017
                                                                                                                                                                            • Pubs’ role as social space endures
                                                                                                                                                                              • Meals and special occasions a bigger reason for women to visit pubs
                                                                                                                                                                                • Entertainment can help generate footfall on quieter days
                                                                                                                                                                                  • New menus and promotions can help trigger visits
                                                                                                                                                                                  • Factors Influencing Choice of Pub/Bar

                                                                                                                                                                                    • High quality food most important
                                                                                                                                                                                      • Figure 30: Factors most likely to influence choice of pub/bar, March 2017
                                                                                                                                                                                    • Price matters to more than half
                                                                                                                                                                                      • Friendly and quick service can make a difference
                                                                                                                                                                                        • Outdoor facilities add to the appeal of pubs
                                                                                                                                                                                          • Drinks offer less important than food menu
                                                                                                                                                                                          • Attitudes towards Pubs/Bars

                                                                                                                                                                                            • Strong demand for quiet areas in pubs
                                                                                                                                                                                              • Figure 31: Attitudes towards pubs/bars, March 2017
                                                                                                                                                                                            • Table service can improve the pub experience
                                                                                                                                                                                              • Digital and social media are important communication tools
                                                                                                                                                                                                • Many patrons research pubs before visiting
                                                                                                                                                                                                  • More than a quarter like to follow pubs on social media
                                                                                                                                                                                                    • Figure 32: Attitudes towards pubs/bars’ online presence and social media, by age, March 2017
                                                                                                                                                                                                  • More than a third interested in calorie counts on drinks menus
                                                                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                                                      • Abbreviations
                                                                                                                                                                                                        • Consumer research methodology
                                                                                                                                                                                                        • Appendix – Market Size and Forecasts

                                                                                                                                                                                                            • Figure 33: UK pub industry revenue, by segment, 2011-21
                                                                                                                                                                                                            • Figure 34: Best- and worst-case forecasts for the UK pub market, 2016-21
                                                                                                                                                                                                            • Figure 35: Best- and worst-case forecasts for UK pub industry revenues of alcoholic drinks, 2016-21
                                                                                                                                                                                                            • Figure 36: Forecast for UK pub industry catering (meals) revenues, 2011-21
                                                                                                                                                                                                            • Figure 37: Forecast for UK pub industry soft drinks revenues, 2011-21
                                                                                                                                                                                                            • Figure 38: Forecast for UK pub industry revenues of other items*, 2011-21
                                                                                                                                                                                                          • Forecast methodology

                                                                                                                                                                                                          Companies Covered

                                                                                                                                                                                                          To learn more about the companies covered in this report please contact us.

                                                                                                                                                                                                          Pub Visiting - UK - May 2017

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