Pub sales set to drop by £1 billion

12th November 2008, 11:19am

The UK pub sales are likely to fall by a staggering £1 billion this year and are set to decline by a similar figure next year, according to a report from market analyst Horizons.

While many operators have turned to food to improve turnover, food sales across the pub sector would have to rise by 20% in order to fill the gap entirely, suggested the 'How Can Food Fill a £1bn Gap? report.

Pub sector sales were worth £22.5bn last year, with food (and associated drinks) representing around 28% of that turnover to reach £6.21bn.

Peter Backman, managing director of Horizons, commented on the results: "A more realistic figure is that the UK pub sector could improve turnover from meals by £400m, which still leaves a shortfall of £600m."

He continued: "Food has a lower margin than drinks so pubs would have to sell more of it to make the same amount of profit. The additional problem for pubs is that their kitchens and layout often make it difficult for them to grow their food sales without a major investment. The current prediction that 1,500 pubs will close per year could be under estimating reality."

"As pubs compete more fiercely for declining food sales we are likely to see prices lower, and therefore margins reduce. This puts further pressure not only on the pub sector, but on restaurants and quick service outlets too."

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• 10 Jun 2009 - Eating out is falling after hitting new high

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