Feeling the heat wave
Pubs stand to benefit froma dining-out revolution', reports Tony Halstead.
Lifestyle and leisure industry forecasters believe the "eating-out market" will grow by more than 20% over the next five years. And pubs that are already making substantial inroads into the traditional restaurant sector stand to make most from the increase. The pub sector is in a perfect position to capitalise on the continuing dining-out leisure "revolution" which has been evolving dramatically over the past 20 years.
While the scope for expansion in the traditional high street and town centre sector suffers from high costs and lack of space, it's the traditional village and rural pub where many new restaurants and quality food operations are set to open. Skilled chefs and restaurateurs, frightened off by high town centre rents and business rates, have been beating a retreat into the provinces for a number of years. Huge numbers of traditional pubs have already been converted from old-fashioned tap-room beer venues into fashionable eating houses.
The typical English pub benefits from low overheads, domestic accommodation, car parks and a host of other facilities. And altering a pub as opposed to setting up a restaurant can mean less red tape in planning, interior conversion is normally straightforward and the required licences and consents are nearly always already in place. In short, the British pub, which continues to suffer from the national decline in beer volumes, is now at the mercy of the modern-day caterer.
"Many more pubs are undoubtedly set to change into food-led operations and restaurants over the next few years," says Richard Negus, head of restaurants for agent Fleurets. "Restaurant operators are searching for new premises to meet increased consumer demand and to realise opportunities from failing pub businesses. "Pubs have many advantages over traditional high street restaurants, where operators have previously found sites unaffordable. Pubs provide excellent facilities for restaurants and food-led businesses, but finding them can often prove difficult as selling agents do not always see the true potential and consequently fail to market them properly. "Entrepreneural restaurateurs must therefore keep a lookout in the licensed trade press and pub company websites for suitable opportunities."
Neil Morgan, director of agent Christie & Co, believes the pub food phenomenon is now so advanced that the first gastro-pub chain may not be far away. "The development of this market is purely through the growth in eating out and because food is becoming king in the pub trade," he says. "Profit margins on food are much greater than wet sales, particularly in tied lease pubs, and customers are particularly being attracted to these venues because of the quality food sold at prices which are generally lower than a restaurant thanks to the lower overheads. "For many, it represents the chance to eat a quality meal while still enjoying traditional pub hospitality."
Morgan reveals that Christie's is receiving an increasing number of enquiries from qualified chefs and restaurateurs whose forays into the pub market often prove the salvation for many rural inns. "The market for leases, which can be more cheaply acquired than freeholds, is particularly benefiting from this trend, helping to increase significantly the value of such properties," Morgan adds. But Fleurets' divisional director Graeme Bunn warns that not all gastro-pub ventures are guaranteed success. "Simply refurbishing a tired old pub and labelling it gastro will not succeed, because, as with all restaurants, high standards of product offering and service are needed. "Fail with this most basic requirement and the venture will also fail, but, conversely, in the correct location, close to a dense and affluent population, a quality food-led pub will do the business," he explains.
