by Mike Bennett
A major new report predicts the continued demise of "chameleon" pubs and bars caught in the middle between innovative high street operators and food-led locals the likely winners in the long-term battle for the consumer's wallet.
The report predicts that consumer confidence and with it trade should pick up in the second half of the year, when "benefits emerge from the current high levels of refurbishment activity".
And it says licensed property should become cheaper as competition declines and the weaker companies drop out of the running, their "failed brands" cherry-picked by the strong performers.
The 130-page survey is the biggest ever produced by finance house WestLB Panmure and was led by two of the most respected leisure sector analysts, Douglas Jack and Stuart Price.
"We expect specialists to emerge as the sector winners," the report states.
"These should be food-orientated traditional/residential pubs and clearly differentiated entertainment, premium and mainstream discount outlets on the high street."
The town and city centre "chameleon" bars trying to satisfy changing customer needs at different times of the day have run their course, the analysts insist, with the middle market they serve disappearing.
As a result, they believe that the scourge of deep discounting should disappear and pricing become more realistic.
But even the successful operators won't be able to rely on sales of alcoholic drinks with annual growth tipped to reach a miserly 0.5% overall.
Food in pubs, on the other hand, has doubled in 15 years and now makes up a quarter of all sales.
"This is not a short-term trend," says the report.
"In some cases, it can be as cheap to dine out as it can be to eat at home."
WestLB Panmure's predictions WINNERS FULLERS "the strongest balance sheet in the sectorconsiderable firepower."
GREENE KING "excellent defensive stock for an uncertain environment."
INVENTIVE LEISURE "we once said it would be one of tomorrow's stars; that tomorrow has arrived."
LOSERS JD WETHERSPOON "increasingly difficult to expand in residential areas post-licensing reform.
At risk from local political emotion."
YATES GROUP "operates in the middle of the high street chameleon market.
Margins and returns have almost halved in the last five years.