Food-led pubs decline by 2% in UK

Café bars continue to grow in popularity due to their ‘chameleon’ offering which appeals to a wide consumer base.
Café bars continue to grow in popularity due to their ‘chameleon’ offering which appeals to a wide consumer base.

Pubs with food seem to be declining at a slower rate compared to wet-led pubs in the UK where food-led pubs have declined by 2.2% in the past year compared to drinks-led ones which have declined by a higher 4.4%.

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Off-trade

22 August 2013

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During this time social clubs there have declined by 4.9% according to First Drinks, a wholly-owned subsidiary of William Grant & Sons in the UK, which recently published its third annual report into the UK drinks market.

The UK on-trade dominates value with a 59% share of the market compared to the off-trade but it’s the UK off-trade that dominates volume with a 78% share compared to the on-trade.

GB’s Beer, Wine & Spirits market worth £38bn
With the GB Beer, Wine & Spirits market growing 3% to £38 billion overall, the GB Spirits market has risen 6% in value to £8.7 billion with spirits out-performing BWS across both on- and off-trade channels, the company reports that the spirits category is the number two sub-category in the BWS on- and off-trade, up 8% and 4% respectively.

The BWS on-trade itself is up 3% to £23.5 billion while the off-trade grew 2% to £14.8 billion.

In total, UK pubs & clubs’ value share of the total BWS market has grown 2% to £18.6 billion while that of hotels and restaurants has shot up 10% to £5 billion. In the off-trade, the multiples have again grown share by 3% to £11.6 billion at the expense of the convenience stores (down 3% to £3.3 billion).

“61% of households purchase spirits 11 times per year,” states First Drinks, adding that, “Within the current economy, the quality of product and experience remains key. Consumer and shopper habits are reflecting this with premium and value retailers both enjoying growth.”

Brand hunting at affordable prices has been facilitated by discount vouchers and First Drinks estimates that as much as two-thirds of people have used discount vouchers from voucher websites when eating out in the last 12 months.

Since the last report the company has found an increase of 5.5% in the number of restaurants, a 3.3% increase in café bars, a 2.5% increase in hotels, a 1.6% increase in branded food pubs and a 1% increase in ‘circuit bars’ and nightclubs.

Café bar culture
Café bars continue to grow in popularity due to their ‘chameleon’ offering which appeals to a wide consumer base, now accounting for 11% or £600 million of total value sales in the on-trade (representing a growth of 6%).

They account for 53% of all new openings in the past 12 months in the UK and currently comprise over 6,000 outlets there. While 30% of them are premium, they deliver 40% of value sales.

Spirits tend to be a big seller in UK café bars. They account for 32% of total liquor sales where this figure is more typically 22% in the rest of GB outlets. Café bars’ spirits prices can command a 20% price premium over the rest of the market with some 50% of sales being of premium spirits here were it’s more commonly 45% in the market as a whole, reports First Drinks.
Again here, 50% of value sales are delivered through vodka and non-cream liqueurs “which both over-index vs the total market”.

Within the spirits market in café bars, growth categories comprise: Cognac, up 20%; Spiced Rum, up 40%; Golden Rum, up 35% and premium Gin, up 25%.

Perfect Serve – the real profit driver

Despite continued austerity, UK consumers continue to look for quality drinking experiences both in the on- and off-trade. The ‘perfect serve’ cocktail is a real profit-driver for the on-trade with more than two-thirds of consumers willing to pay more for a unique serve, according to the report.

First Drinks found that people place more importance on experiences than possessions and premium brands are well placed to deliver the kind of high quality experiences people are looking for with 38% of consumers claiming to be willing to pay more for quality.

Indeed premium spirits are now worth £475 in the on-trade, up 25% and they’re worth £221 million in the off-trade, up 4%, the report finds.

“Going out is one of the biggest cutback areas,” admits First Drinks, “However, when people do go out they want a quality experience with 51% looking for new products and services. 47% also look for novelty and fun with many bars now appreciating the need to be innovative with their serves and menus.”

Over 80% of UK consumers want the drinks they order to be served in an appropriate glass and 51% of spirit drinkers claim they’re always on the lookout for new offerings. 55% of 18 to 24 year-olds would like to find out more ways to drink their favourite spirit.

Gifting value
Gifting is also a key focus for the spirits category with gifts comprising one in three purchases.

“Alcohol gifting presents a great opportunity, estimated to be worth £572 million and they are not just seasonal purchases with 60% taking place all year round,” points out First Drinks.

Café bars continue to grow in popularity due to their ‘chameleon’ offering which appeals to a wide consumer base.

Café bars continue to grow in popularity due to their ‘chameleon’ offering which appeals to a wide consumer base.

 

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