According to the new Lumina Intelligence UK Pub & Bar Market Report 2021, the UK pub and bar market is set to grow +63% in 2021, to a value of £14.8bn. This follows a catastrophic 2020, which saw the coronavirus pandemic wipe £13.9bn or -61% off the value of the market.
UK pub and bar market to recover to 64% of its pre-pandemic value in 2021
The £14.8bn that the market will be valued at by the end of 2021 is a recovery to 64% of the £23.0bn that the UK pub and bar market was worth before the coronavirus pandemic started.
A dampened start to 2021 with a national lockdown and restrictions on trading until July will hamper the sectors ability for a faster recovery. However, managed, branded and franchised pubs are set for the strongest recovery (+64%) in 2021, with a greater proportion of sites able to capitalise on delivery and takeaway opportunities in the first half of the year.
Top 10 pub groups set to see -57.8% turnover decline in FY 2021
The top 10 pub groups by turnover are expected to see considerable turnover decline in their 2020/21 financial years, led by closures and trading restrictions across the period. Whitbread, Marston’s and Mitchells & Butlers are among those seeing the largest turnover decline in FY 2021.
In contrast, outlet growth among the largest pub groups by outlets is expected to be +1.6%, with Admiral Taverns adding 674 pubs to its estate through its acquisition of Hawthorn.
2 in 5 pub visits are for drinks only.
Drinks only occasions are vastly more important to pubs than the average hospitality channel – accounting for 42% of visits. Dinner is the most important meal, accounting for 24% of all pub and bar occasions. Pubs can capitalise on the dinner day part by offering dinner and drink deals to encourage customers on a drink only mission to also purchase a meal.
Lunch accounts for 22% and breakfast 3% of total occasions, however, there is an opportunity to boost breakfast and lunch sales through “work from home” lunch and Wi Fi deals, which many pub and bar operators have introduced over the past 18 months.
Over a third would like to keep using digital in pubs
34% of consumers agree with the statement, ““I have been using QR codes and mobile app ordering and payments technology and would like to keep using them in the future”. This rises to 38% for 18-24 year-olds and 45% for 35-34 year-olds.
44% agree that “using a mobile app/QR code to order from the table in pubs and bars is more convenient than ordering at the bar from staff” and 45% agree that it “is faster than ordering at the bar”.
Full market recovery expected by 2024
By 2024, the UK pub and bar market will have recovered to and exceeded its 2019 market value. Year-on-year, the total UK pub market is expected to grow by +51.8% in 2022, reaching a value of £22.4 billion. Thereafter growth will stabilise at around the 2% mark ahead of reaching a value of £23.4bn in 2024.
Commenting on the results, Senior Insight Manager at Lumina Intelligence, Katherine Prowse, said: “Despite a catastrophic last 18 months, the UK’s love affair with pubs remains intact and will see the market not only fully recover by 2024, but also outpace value growth in the total eating out market.”
“The legacies of the pandemic present significant opportunities to operators and will remain key to market recovery. Delivery accounted for 50% of pub/bar occasions during lockdown and offers operators the chance to broaden its consumer base. The adoption of digital has resulted in a quicker, more seamless customer journey, which many customers are now used to and prefer. As well as offering a better experience, digital ordering and payment gives operators access to valuable data that allows them to understand their customers better.
Find out more about Lumina Intelligence’s UK Pub & Bar Market Report 2021 here.