Will licensee optimism continue to rise?
In the Pub Market Report conducted by MCA Insight and the MA last year, the key finding was that licensees were increasingly positive about trading. A quarter of respondents described sales as being up substantially over the past 12 months, up from 16% in 2015. Nearly a fifth, 18%, said sales were down, a decrease from 22% in 2016. Licensees were also bullish on profits, with 56% describing profits as either up a bit or up substantially, compared with 47% in 2016.
What was driving sales at pubs? ‘improved food offer’ was the number one factor, picked by 19% of respondents, followed closely by ‘hosting events’ at 18%, ‘Improved marketing activity’ at 16% and ‘pub investment’ at 16%. These were largely unchanged from previous years.
This was the picture a year ago in 2016, pre-Brexit, when the No. 1 concern for licensees was increasing wages following the introduction of the National Living Wage. When asked to rate key issues on a scale of 1-5 in terms importance, ‘Increases to business running costs’ was the No.1 issue, rated 4.2 on average, up from 4.1 in 2015. When asked which business area had seen the biggest cost increases over the past 12 years, 56% of licensees said ‘Wages’, up from 19% in 2015.
A year on, the industry is in a very different place. Though the long-term implications of Brexit remain unclear, and there may be benefits down the line from lesser regulation, a new threat to the trade has emerged from potential EU migration curbs affecting availability of staff. Food costs are also increasing because of a weaker sterling, yet price rises have to be kept under control as consumer confidence falters.
These are some of the topics that MCA Insight and the MA are exploring in this year’s Pub Market Report 2017. It remains to be seen whether the rising optimism in the trade will continue in 2017, in light of new challenges in the market. We would be grateful if you could share your views on this by completing a five minute online survey, which will help inform the report. We will share the key findings from the industry survey with all respondents.
