Trading conditions have been difficult for a long time. However, new investors, including private equity firms, are undeterred. They have recognised that values have been driven down and created an opportunity for them to pick up portfolios. Judging by the number of enquiries Christie+Co has received from investors seeking industry insight and advice, we can expect them to be much more active in the coming months.
And why not? There has never been a better time to buy a pub. Whilst banks are looking for an exit, experienced operators — including those who have retired — can’t resist the urge to jump back in. Anyone with suitable knowledge and experience has the opportunity to pick up sites at a very affordable level. However, funding remains the big ‘if’.
Through the thick and thicker of recent years, it has been encouraging that the number of pubs remaining as pubs upon sale has risen — last year, according to our own research, it was 65%. We’ve still to conclude our evidence-gathering for this year, but I would be very surprised if we didn’t see another positive leap in the number staying as pubs. It’s also worth noting that, unlike other areas of the hospitality arena, the market mechanism for pubs hasn’t become stuck in the economic mire — the transactional landscape is as fresh today as ever.
Looking ahead, pubs should increasingly seek to position themselves as community service providers and explore new ways of attracting customers from an even wider audience.
Pubs are already meeting the challenge that has been set by consumers for convenient, affordable meals. And with relatively low set-up and operating costs, the addition of letting bedrooms is another valuable way for pubs to increase revenue and boost food and drink spend. The pub companies are already profiting from this, according to recent research by Mintel, which noted customers migrating away from three-star hotels to the traditional inn.
One thing is relatively certain: it is imperative that the sector develops more inventive ways to build revenue in the short-to-medium term.