Tenants lag behind overall pub sector

Almost two-thirds of tenants are trading resiliently, but are still lagging behind the pub sector overall.

That's according to a new survey of 500 tenanted pubs by CGA, commissioned by the Morning Advertiser.

The survey, the first undertaken since the Business and Enterprise Committee (Bec) survey in February this year, found 44% were trading as expected and 20% were trading better.

It comes as a surprise amid the gloomy reports of the state of trade. However, tenants are still lagging behind the trade overall — other CGA surveys across managed, tenanted and freehold sites found 83% were trading in line or better than expectations.

The survey also confirmed that cask ale was in resurgence, with 42% of licensees saying the category is faring better than other major sectors.

Licensees reported that they felt they had a better relationship with their business development manager than their pubco landlord.

Smaller regional tenanted companies scored better than the major companies, but even for the latter group 44% of licensees scored them eight out of 10 or above.

This last result is far less damning a verdict on the pubco/tenant relationship than was suggested by the Bec survey. However, the survey also shows major areas of concern.

A total of 29% of licensees report that their food turn-over is decreasing, which suggests over-provision of food in the tenanted trade. CGA said the results show it is "dangerous to suggest food is a panacea for declining revenues in the tenanted trade".

Around three-quarters of licensees reported they were able to stock a decent selection of brands — but 62% felt they were being beaten by competitors on price. Furthermore, 43% of those stating they are not being undercut on price are not tracking competition.

Not surprisingly, when asked how their pub company could increase its support, 91% of respondents said that they wanted a better rent and drinks supply deal.

Nearly half of tenants re-ported that increasing costs were the biggest threat to their businesses, followed by government legislation — the economic recession scor-ed third on the threat list.

Some 40% of licensees reported that they have experienced increased support from their pub company landlord in the past year, with the figure higher for regional brewers (45%) than major pub companies (36%).

The survey also reveals areas where licensees could be doing more to help themselves. More than a third are not looking at the competition and only 27% inform the local media about their events and special offers.

The results of the survey were unveiled at yesterday's Tenanted Pubco Summit, which was attended by many of the industry's tenanted leaders at the Cranfield School of Management.