Gerald Edelman has released its first industry report, which looks at the performance of the bars and pubs sector. This report marks the first in Gerald Edelman’s series of industry reports, which will focus on a different sector each month.
Gerald Edelman’s ‘Hospitality: Bars & Pubs’ report provides a review and analysis of how bars and pubs have performed in the last year. The report focuses on the trends and changes to consumer preferences and covers four key topics: an industry overview, M&A activity, future outlook and threats to the sector.
Key takeaways from the report are:
- The bars and pubs industry is forecast to grow 0.7% in revenues next year to reach £19 billion
- Since January 2018, the bars and pubs sector has seen signiﬁcant M&A activity. There have been over 180 M&A deals in the UK in the sector since the start of 2018
- Two of the largest ever pub and bar transactions have been announced in the last few months.
- Beer is the industry’s key revenue stream, although it makes up a smaller portion (expected 32.4%) than in the past
- Wine consumption at pubs and bars has grown strongly over the past ﬁve years and is expected to generate 11% of industry revenue in 2018-19
- Sales of spirits and spirit-based drinks, or ready to drink beverages (RTDs), are expected to account for 15.7% of industry revenue in 2018-19
- Food is playing an ever more vital role as drink sales decline and as operators attempt to keep up with changing consumer tastes and increase expenditure per customer
- Some of the risks to the industry over the past few years have involved declining alcohol consumption per capita and increased competition from supermarkets.
Nick Wallis, Partner of Gerald Edelman Deal Advisory, focusing on selling private businesses, stated, “As a business, we continually look for new ways to demonstrate our knowledge and provide insight for business owners and potential acquirers / investors. We have recent experience of completing deals within the sector, and are currently working with a number of clients in this space and are therefore seeing the pubs and bars sector continuously evolve. With Brexit looming, it is paramount that stakeholders remain up-to-date and aware of any obstacles they may have to overcome, as well any opportunities that might present themselves.”
Visit the Gerald Edelman website to download the full report: geraldedelman.com/insights/