Food Quality Drives Pub Traffic – M&C Report

Food Quality

Food Quality Dives Publ Traffic

The traditional pub is getting a makeover as operators find opportunities for growth through focusing on food rather than drink.

The recession coupled with decreasing consumer confidence has impacted the pub sector. Technomic data shows that about two-fifths of consumers are visiting pubs less often today than last year, and a majority of these consumers attribute their decreased patronage to having less money to spend on dining out. However, recent figures from the Coffer Peach Business Tracker show signs of improvement in pub sales: like-for-like sales increased by 2.1% in November 2011 compared to the same period last year, the sixth positive month running.

This increase may be due not only to the economic recovery, but also to changes in the pub sector, with these concepts placing greater emphasis on food and offering a wider variety of higher-quality options.

Wet-Led Pubs vs. Food-Led Pubs

Traditional “wet-led” pubs that focus solely on beverages may have lower operating costs overall, but are potentially missing out on new growth opportunities as “food-led” pubs expand their menus, attract new customers and redefine the pub market. The gastropub trend has revitalised pub menu development, and customer expectations for food quality and menu variety at pubs have shifted.

A recent survey by Jones Lang LaSalle Hotels finds that there are 25 pub closures each week. In total, 45% of pub operators reported a decrease in sales since last year. Among wet-led pubs, 66% reported sales declines, but among pubs selling food, 62% reported an increase in sales. These findings are leading some insiders to call food a “lifeline” for wet-led pubs to boost sales and thrive as segment sales slow.

There are operational challenges associated with delivering a solid food offering; employment and equipment costs are just two. The Association of Licensed Multiple Retailers estimates that food-led pubs have operational costs 7% higher than those for wet-led pubs. But many pubs are finding that the higher profits generated by food (an overall 14% improvement in profitability over the past three years, according to ALMR) offset these higher operating costs.

Raising the Bar on Menus

In a survey for Technomic’s recent U.K. Pub Consumer Trend Report, nearly a fifth of consumers, and half of consumers aged 18–24, report that they are visiting pubs more often compared to a year ago. One-third of consumers who are visiting pubs more often than they were a year ago say it is because the food is now higher in quality and tastes better, the top reason for consumers’ increased pub visits over the past year. In addition, more than a quarter of consumers (27%) cite the greater variety of food options available. More males than females cite both of these as reasons for their increased pub patronage, indicating that males place higher importance on the quality and variety of food options.

About three in 10 consumers say they are patronising pubs more often because they have more money to spend on dining out in general. Additionally, a fifth of consumers say they are visiting pubs more often because they are trying to save money and pubs offer a better value than full-service restaurants (22%) and low prices (21%).

An appealing atmosphere rounds out the top three reasons why consumers are visiting pubs more often, with 29% of consumers citing better atmosphere. Nearly the same percentage of consumers (26%) says that pubs are now a good option for dining with their family. Pubs have recently started to make changes to their concept to appeal to families, and this data shows that these changes are driving traffic among some consumers.

Why have you been visiting pubs more often? Select all that apply. (by gender)

Base: 177 consumers aged 18+ who are visiting pubs more often
Source: Technomic, Inc., 2011 U.K. Pub Consumer Trend Report

Although many independent, non-brewery pubs are well-known for offering high-quality food, the quality of food at most pubs historically has not been of significant concern to consumers. However, data shows a shift in consumer perceptions of pub food. Roughly four out of five consumers report that the food’s quality and freshness (82%) and taste and flavour (79%) are important. Quality, freshness and taste are all related; higher-quality, fresh ingredients tend to taste better. More consumers place importance on quality than on overall value for money spent at pubs, and nearly as many consumers place high importance on the food’s taste as on overall value. This supports the idea that quality and taste are driving the importance of overall value at pubs.

More women (85%) than men (80%) place high importance on the quality and freshness of food, perhaps because they think fresh, high-quality options are healthier.

Thinking about all of your visits to pubs how important or unimportant are the following? (by gender, top two box = extremely important and important)

Base: Approximately 350 consumers aged 18+, varies slightly by attribute
Consumers indicated their opinion on a 1–6 scale where 6=extremely important and 1=not important at all
Source: Technomic, Inc., 2011 U.K. Pub Consumer Trend Report

Attracting More Customers

Technomic asked consumers what pubs could do to encourage them to visit more often. Consumers’ top three responses relate to finances. More than half of consumers say that lower prices could encourage them to visit pubs more often. In a related finding, nearly two out of five consumers indicate that they would visit pubs more often if they offered a better overall value, and 31% say food specials or promotions could encourage them to increase visits to pubs.

Variety of food offerings can also drive traffic among some consumers. About a quarter of consumers say they might visit pubs more often if they offered more main dishes to choose from, and 13% of consumers say the same for starters or snacks.

While more males say that lower prices and a better overall value could encourage them to visit pubs more often, more females report that food specials or promotions, healthier food options and more starters or snacks could prompt them to patronise pubs more frequently.

What could pubs offer to encourage you to visit more often? Select all that apply.
(by gender)

Base: 1,000 consumers aged 18+
Source: Technomic, Inc., 2011 U.K. Pub Consumer Trend Report

The New Craft Pubs

It’s worth noting that at the same time food-led pubs are growing, another concept-positioning direction is gaining among some pub operators. Instead of modelling themselves exclusively after food-led pubs, which focus more directly on food than on drink, “craft” pubs give equal attention to both and make ingredient attributes for food and drink the focal point of the menu.

Craft pubs differ from gastropubs, which are known for eclectic, gourmet food offerings—not as pubs where people can just drop in for a drink. Instead, craft pubs are positioned simply as traditional English pubs where beer is a draw, and the menu features classic pub foods, not heightened “gastro” fare. In promoting the sort of traditional pub foods that pair best with English cask ales, craft pubs present rustic versions of shepherd’s pie, fish and chips, pork pies, sandwiches, sausage rolls or cheese and meat platters instead of global offerings or trendy cuisine.

The true point of differentiation for craft pubs, however, is a clear commitment to local ingredients, seasonal components, ethical sourcing and an overall artisanal approach to food preparation. The food may be simple, but its preparation relies on foraging, securing produce from local farms and purveyors, and homemade cheeses, toppings, sauces and other main-dish components. At craft pubs, the food is approachable and familiar, yet attractively presented.

Craft pubs, therefore, reject a description as being either wet-led or food-led. Rather, the concept presents itself as a traditional English pub that welcomes drinkers who aren’t necessarily there to eat, and attracts customers that are looking for classic, authentic and decidedly artisanal pub fare to pair with craft beers, ciders and other drinks.

Key Takeaway

While pubs have traditionally been known as a destination for adult beverages, the past decade has seen pubs expanding food and non-alcoholic beverage items to the point where food is an expectation at many locations. While this has broadened the sector’s audience, pubs are still not top of mind for non-drinking occasions and casual meals, making these areas of opportunity for pubs.

Operators who appeal strictly to the adult beverage crowd may want to consider altering their positioning and marketing message to include non-drinkers in order to boost traffic and sales. Offering non-alcoholic beverages along with a wider variety of food and breakfast fare, while increasing focus on quality and health, may help to expand the customer base beyond the adult beverage consumer.

This article came from a print version of M&C Report

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: