A new trend in trade

As the shift in focus from beer to food gains momentum in pubs, Tony Halstead finds out how town-centre venues are evolving

A continuing decline in beer drinking coupled with the advent of the smoking ban is bringing a subtle change to the UK's high-street pub landscape.

Traditional town and city-centre venues are now turning to food to compensate for the loss of valuable wet trade income, and restaurant operators are themselves casting a keen eye over the pubs that find they cannot keep pace with the new order.

The signs are that food pubs and restaurant chains will be the new force on the high street as the widely predicted migration of non-smokers into licensed premises begins to materialise. This emerging trend confirms that the high-street meltdown of three years ago has been largely arrested and the sector has finally stabilised.

Food is currently the buzz word, with operators extending their retail offer to combat and even capitalise on the smoking ban, says Richard Negus, head of chartered surveyor Fleurets' restaurant division.

"The restaurant sector continues to be incredibly active, with operators seeking out suitable sites and keen to look at pubs for conversion in high street or suburban locations.

"Pub operators are also having to up their food offer to compete in the market place and compensate for potential lost drinks sales resulting from the smoking ban.

"Any premises unable to keep pace can find itself a likely target for restaurant conversion, particularly if the pub comprises an attractive building with outside seating," he says.

"After a period of some difficulty for pubs on the town and city high street, prospects have improved and there are generally far fewer to-let signs visible as operators come to terms with changes in licensing and the smoke ban.

"The smoking ban has meant pub operators are offering more of a quality act to attract those customers who deserted them, and that means food in a more stylish environment.

"Small pub and bar groups are still particularly active at the moment, scouring for likely sites, and the market in the more affluent London suburbs is particularly buoyant," Negus adds.

High-street pubs are still enjoying increased trading levels brought about by extended hours provided by 2003's Licensing Act.

Many high-street pubs are still benefiting at the expense of the nightclub sector which has lost customers to bars now able to trade longer into the night. But an increasing number of pubs are turning towards food to compensate for lost beer trade brought about by the smoking ban, says director of public houses for Christie+Co, Colin Wellstead.

"Licensees and pub operators are revamping their food offer to capitalise on the new market, while restaurant operators are actively seeking suitable pub properties for conversion into food premises."

Wellstead warns against those who predict the death of the traditional high-street pub.

"Beer pubs and bars will still remain a feature on the high street, although a greater number will now be forced to provide a more mixed retail offering," he forecasts.

"Big names such as Wetherspoon are now actively developing new pubs again and more specialist operators are emerging, particularly on a regional basis where operators know the local market and pitch their offering accordingly," he adds.

Wellstead believes that after the meltdown on the high street three or so years ago, which saw a number of big names crash, stability has now been restored.

"There is still a healthy demand for town and city-centre properties thanks to new operators coming onto the scene, but now on a strict proviso that rents are not prohibitive.

"We have moved on from the days when operators paid crazy rents and got their fingers burnt when trade levels dropped or when rival bars appeared to steal their market.

"The secret is to trade at rental levels which can take account of a sudden fluctuation in trade, so that a business can cope with the bad times as well as the good ones," he says.

Climate change in pub culture

The so-called meltdown of a few years ago seems to have claimed its casualties and settled down, confirms Graham Allman, managing director of licensed property agents GA-Select.

"The term survival of the fittest comes to mind. However, it is noticeable that some high-street brands are getting somewhat long in the tooth and are in danger of losing ground to more cutting-edge operators, especially those from the private entrepreneur sector as against the chains.

"New, interesting high-street projects are attracting venture capital (VC) funding which in turn is stimulating the cross-fertilisation

of conceptual ideas.

"However, most VCs will only support concepts that have a freehold property base as against lease holdings, in order to spread their risk base - ie, alternative use of the property should the concept fail," Allman says.

"One of the Government's objectives within the Licensing Act 2003 was to create a café culture, which of course was doomed to failure from its conception, mainly due to the climate within the country and the vertically-favoured style of drinking most younger people enjoy and prefer on the high street.

"This encouraged many operators to follow this line, many to their peril. The more mature consumer prefers sophisticated surrounds such as new cafés on the Thames at Battersea.

"Town-centre pubs need to re-invent themselves and provide a higher quality

food offer, including traditional favourites such as stew and dumplings, and good quality fish and chips, along with quick snack foods of a more wholesome nature, including Welsh rarebit and crusty cheese and onion rolls with pickles," he adds.

"Town pubs with outside patios are ideally placed to major on this opportunity and add value to their businesses."