Why pubs should remain positive despite predicted troubles for industry

29-Sep-2017 - Last updated on 02-Oct-2017 at 09:58 GMT

Still positive: CGA's Phil Tate discusses the next five years in the pub industry

While banks and pubcos are predicting a monumental storm for the pub trade, CGA Strategy’s chief operating officer has said that despite the future looking incredibly challenging, "it’s not all doom and gloom".

Speaking at the Association of Licensed Multiple Retailers’ (ALMR) 2017 autumn conference on Wednesday (27 September), Phil Tate shared future trends and insight from CGA for the next five years.

Tate said he expected there would be an “extensive amount of change” in the hospitality sector and pub trade by 2025.

“There’s a lot for us to be positive about, although there will be some losers, he said.

“There are incredible headwinds at the moment. I predict we will lose 2,500 outlets by 2020.”

Spend per head on the up

However, Tate said premiumisaton shows no sign of slowing down, with on-trade value predicted to grow by an extra £3bn by 2020.

Research by CGA also shows the industry will continue to have a consumer that engages with pubs at the same level as they are now in five years’ time.

His report also said spend per head was likely to increase, “if the range is right and the experience delivers”.

On how to survive the headwinds, Tate said: “Value for money, location, quality food offer, choice, previous visit consistency, atmosphere, convenience.

“You have to be great in every area, you need to tick all those boxes. Gone are the days of being great at one thing,” said Tate.

He added: “Experience is and will continue to be key to success”.

According to CGA research, 7.1m GB consumers want to try something new, and it is not just Millennials who want choice.

Realist

“With all the data, I would say I am a realist, as opposed to a pessimist or optimist,” continued Tate.

“Without doubt due to the current perfect storm of market forces the future will not be without its challenges but so is the here and now.

"However there are a huge amount of positives that we should also be considering, we have a consumer who will continue to engage with our sector at least at the same levels as they are now and actually as people take their habits with them there is the potential for more visits in coming years.

"In addition to this, the third wave of premiumisation is seeing our spend per head continue for the outlets that offer the right range and most importantly experience and that is the key.

"Experience will continue to be king and there is one thing our industry continues to do and that is provide some of the most memorable experiences our customers can wish for.”

He added: “However, if we get complacent in any way, we will lose.”