Pub food mark-up 'too light'

Pubs are being encouraged to be less modest with their profit margins post-smoking ban. With dining out set to increase after 1 July, research provided by Horizons FS urges pub caterers to work towards a more generous profit margin.

Horizons FS managing director Peter Backman said that pubs cost dishes by 2.9 times the price of ingredients, but restaurants go for a more healthy multiple of 3.4. 

He added: "Mark-up in pubs tends to be on the light side. The problem is that the more food that is sold in a pub, the less the pub can rely on drinks sales to cover overheads. I think they should aim for three times the cost of ingredients."

The average cost of ingredients for a pub meal in Britain is £1.15, with unbranded managed outlets spending £1.05 on an average plateful and high-street names spending an average of £1.29.

Backman said: "The interesting thing is that in 2001, the average cost of ingredients was also £1.15 - in inflation-adjusted terms - yet the standard of pub food has improved vastly.

"Pubs are spending the same now as they were six years ago.

"I think this is largely due to the improved standard of offering from foodservice, suppliers and distributors."