Quarter of pubs have reduced opening hours
New research from the AIB has confirmed the very serious challenges facing the licensed trade sector with a quarter of pubs having reduced their weekday opening hours in the last year, rising to one in three in rural locations while one in six pubs have reduced their weekend opening hours.
Print28 August 2013
According to the fourth report on the licensed trade from AIB in association with the VFI and LVA, 50% of publicans have experienced a decrease in turnover in the past year, particularly in rural areas, while 30% of those surveyed experienced a turnover increase.
The latest sector report explores how Irish pubs are changing and investing for the future and forms part of a series of outlook reports for the SME sector compiled by AIB.
The report shows that publicans are more optimistic about their own business than they are about the industry in general. Almost 52% of publicans are optimistic that their own business will be better in the next three years compared to 37% stating that it will take five years for the industry to recover.
Marketing
Progressive pubs are focussing on things they can change to improve their pub’s performance and are using food, events and better customer service to drive sales.
Food is an important driver of growth for pubs with 35% seeing an increase in food turnover. The survey found that almost four out of five pubs (79%) had organised events such as comedy or quiz nights over the last year in order to attract more business.
It is the urban pubs – particularly those in Dublin – which have benefited most. One in four Dublin/urban pubs have seen an increase in their tourism numbers in the last 12 months.
Customer profile
According to the research the customer population appears to be ageing with only a third of pub customers under 30 years of age, while 43% of publicans are not proactively targeting the under 30s market.
Customer behaviour has changed too with close to three-quarters (71%) of those surveyed arriving to the pub later and staying for a shorter time.
The impact of access to cheaper alcohol in the off-trade business has resulted in increased levels of drinking at home. Almost four out of five publicans believe that their customers are having drinks before they come to the pub.
Top concerns
The top concern facing publicans is local authority rates, followed by access to cheap alcohol in supermarkets and wage costs.
However almost half of pubs surveyed (46%) are planning improvements for their business in the next three years.
“This research confirms the severe challenges facing the pub sector at present,” commented VFI Chief Executive Padraig Cribben, “It demonstrates a level of polarisation in performance but also a resilience and determination on behalf of many in the sector to overcome these challenges by way of innovation, enhanced customer service and revised product offerings. Customers are spending less time and money in pubs while at the same time demanding a wider range of services overall.”
While LVA Chief Executive Donall O’Keeffe added, “There’s no doubt that the pub trade in Ireland has suffered enormously over the past five years. However, it is encouraging to note that this AIB research confirms that the Dublin market is performing relatively well and that leading Dublin publicans are reporting turnover growth in their businesses.
“Focus on the customer, excellent levels of service and continuous development of the drink, food and entertainment offers are all driving these businesses forward. Irish people love to socialise together – recession or not – and Dublin pubs are well-positioned to serve them.
“While serious challenges remain, we remain confident in the future of the Dublin pub.”
This research demonstrates that publicans are resilient and are adapting to market challenges and changing consumption habits through a revamped food offering and creating a pub experience through events and entertainment, concluded Head of Business Banking at AIB Ken Burke.
“With overall tourism numbers on the increase, more and more publicans are also tapping into the tourism market for customers and it’s no surprise to learn that a visit to an Irish pub is cited by tourists as one of the top things to do in Ireland,” he stated, “AIB understands the importance of the licensed trade sector and is committed to supporting our customers in this sector. We have dedicated relationship managers across our corporate business centres and branch banking operations with the knowledge and expertise to support licensed pubs customers to deal with the challenges and opportunities that lie ahead.”
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