Flat beer sales put the fizz into food

Amid a backdrop of flat beer sales, the pub industry is placing less emphasis on drinks and taking advantage of an increasing share in the dining market.

The question of whether people will continue to eat out is imperative to a modern pub. Pub meals, including drinks sold with food, account for some £9.8bn of an eating out market worth an estimated £45bn per year, according to the consumer research group NPD. Pub’s share of the dining market is growing. Coffer Peach Business Tracker revealed that pub chains outperformed restaurants by approximately 2 per cent in every month except one last year.

The most overtly food-led of the pub chains – Marston's, Greene King and Mitchell's & Butlers – continue to increase their bottom line. Pub companies who derive their income from rent and beer sales instead of food are finding trading more difficult.

These “wet” pubs, which rely mostly on beer sales for income, accounted for around half of total pub closures last year, according to pub campaigners Camra.

With food inflation expected to level off, pub-food companies say they can maintain competitive food prices while protecting margins and increasing their market share.

Restaurants should watch out as pub grub’s getting smarter at winning their business.

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