Pubs set to take share from restaurants

Pubs are better placed to ride out the credit crunch than restaurants, according to the latest research by Horizons.

Investment by managed pub operators in marketing and innovation to drive the food offer threatens to leave restaurant brands standing, according to Horizons' market analyst Peter Backman.

"Now consumers are feeling the crunch they are cutting back on discretionary spend - including eating out," he said. "When they do eat out they will be looking for value-for-money, reliable service, good quality food and something that offers them what they want, when they want it.

"Competition in the high street has never been more aggressive."

Although pubs are undoubtedly feeling the pinch, Backman believes that innovation in the pub sector has set the trade up to come through the consumer downturn in reasonable shape.

Many pubs have improved the quality of their food, cooking more from scratch and using locally-sourced ingredients, while others have broadened their appeal by opening for breakfast, morning coffee, afternoon tea and early evening meals.

Some have even introduced a retail element, with farm shops operating at a number of rural pubs.

"We are also seeing an active range of promotions in pubs that include themed evenings, free desserts, free wi-fi connection, organic and locally-produced food," said Backman.

"Pubs and restaurants are moving much more closely together, creating a market where there is too much capacity and not enough demand.

"Many pub operators are managing to keep their offer fresh with new ideas and innovative marketing techniques. If restaurant operators don't do the same they will lose their market share - some could go out of business."