Pubs that blend with restaurant-style catering are onto a perfect combo. Be quick to snap up likely sites as demand is high, reveals TONY HALSTEAD
There are probably no official figures available to indicate just how many pubs across Britain still survive without offering a food service to customers.
But the number is undoubtedly well down into single figure percentages reflecting just how catering has taken over from beer as the core business of an increasing number of public houses.
If simple snacks and basket meals began the pub food revolution back in the 1960s, full-blown restaurants and dining rooms are now very much an integral part of the UK pub landscape.
Scampi and chips are out, pan-seared fillets of sea bass are in. It's the switch from the simple to the exotic which has marked the relentless rise of the gastro pub over the past 10 years or so.
Consumer preference for quality, informal dining has driven the change and pubs have become the UK number-one dining venue.
And all the forecasts from lifestyle and leisure industry pundits indicate the trend has more scope to develop.
It is predicted the eating-out market in Britain will grow by as much as 20% over the next five years.
And that means more and more pubs will desert their traditional pie and chips image and convert into trendy bistros and brasserie venues.
It would be logical to presume the property market in food-led public houses is vibrant and, indeed, many successful catering house leases and freeholds change hands for high premiums and prices.
But often the picture is not quite so rosy and in some areas, London in particular, food entrepreneurs are getting their fingers burnt when they come to try and capitalise on what appears at the outset to be a thriving business.
Yaser Martini, director of licensed property agent Fleurets, believes too many aspiring gastro-pub operators over capitalise when they first take on a pub business either in premium payments or high cost refurbishments.
Expensive start-up costs are often compounded by high staff wages and running costs, he reveals.
"Consequently there is insufficient return for the operator on the all-important bottom line, despite strong levels of turnover.
"Operators often contact agents to discover their most likely outcome on sale will mean they realise less than their initial investment resulting in the whole experience being viewed as a financial failure," Martini says.
He adds that this scenario had even hit established gastro-pub operators running businesses perceived to be successful who then experience disappointment with the insufficient return on their investment.
"In essence gastro operations showing a marginal or small profit are only likely to sell for a nominal or small premium and often this figure is less than the initial capital investment.
"Our advice to gastro-pub operators who are considering a sale is often difficult for them to comprehend," he adds.
Martini believes good gastro pubs will continue for many years to come, but suggests that at the top of the range an increasing number of operators may accept that food delivered in this way is not worth the effort.
Elsewhere the rise of the food pub appears to be most prevalent in villages and small surburban towns where traditional beer-led houses continue to struggle.
Even though many have been forced down the food route, the fare they have traditionally offered often lacks the essential point of difference to attract established restaurant-goers and other diners to seek out an alternative food experience.
Qualified chefs cook up storm in pubs
Qualified chefs are, however, deserting the restaurant sector, particularly in London and other major cities, and migrating into the countryside to take over village inns struggling to exist on a diet of beer and basic pub grub.
Many of these new ventures are not gastro pubs in the strict sense of the word. They are outlets that feature attractive menus, sound cooking and prices that offer a real alternative to the higher mark-up restaurants and brasseries.
Surveyors and valuers Christie & Co report a buoyant market in the sale of destination food-led pubs through its nationwide network of offices.
The company also reports a steady increase in the number of operators buying pubs to convert into high quality food venues.
As the decline in UK beer consumption continues more and more pubs have been forced to go down the catering route to ensure their future viability.
Rural village pubs continue to find a new lease of life after being taken over by chefs and skilled entrepreneurs and lifestyle areas such as North Yorkshire, Cheshire, and the affluent south east remain a popular location for this kind of new business.
London has also experienced a growth in good food pubs particularly in areas that have seen new residential development.
Andrew Spencer, of Christie & Co's Leeds office, comments: "We are finding the pub market is moving significantly towards food thanks to a drop in drinking trade in these rural and village areas."
Home-owners use equity to buy inns
In north east, David Lee of its Newcastle office, revealed pubs in picturesque areas of Northumberland are changing hands for healthy prices with buyers cashing in on the value of their homes to finance deals.
In the west country, Michael Eaton of the company's Exeter office adds: "The market is seeing an ever-increasing demand for food-led houses where the sector is becoming more defined between the wet-led units in the city and town centres with operators in outlying villages needing to promote food in order to survive."
Miller Commercial, based at Truro in the west country, has experienced a sizeable growth in food and gastro-pub business over the past 12 months.
The company says experienced restaurateurs are tapping into a market where good food and fine dining now abounds in a numerous former Cornish pubs and inns.
The traditional "ploughmans and a pint" has given way to more adventurous eating trends as diners demand restaurant-style food in the informal setting of a traditional pub.
In the past pubs in the region have existed off a strong mix wet and dry sales, but now food has become the core business in an increasing number of venues, says the company.
Miller has completed deals on two prominent food-led houses in recent months including the Slipway Hotel at Port Isaac and the Millhouse Inn at Trebarwith Strand.
Both properties boasted stand-alone restaurant facilities and attracted a high degree of interest from buyers.