We’re all familiar with the doom and gloom the UK pub sector has faced over the last decade.
If not through the demise of your favourite local, you’ll have likely seen reports of pubs closing on a weekly basis across the country. However, newly released government data suggests that our public house woes might be on the turn – in the form of growing pub and bar numbers!
So, what is to account for this change? We’ve looked at the data to see what may have caused this recent turn around, and why more pubs might soon be succeeding.
A recent analysis by the ONS found that the number of pubs and bars increased between 2018 and 2019 – this is the first time these numbers have increased for 15 years (see figure 1). ONS attribute this rise to a change in consumer habits, spending more on food and less on alcohol when out of the house (see figure 2).
For starters, we probably shouldn’t have got so excited about the “increase” in pubs and bars, as the last few years read almost like a straight line. However, the percentage of household spend on ‘eating out’ compared to ‘drinking out’ does raise an interesting question – why have pub numbers increased despite people drinking less?
Digging into the data, you can see that the total number of pubs and bars in the UK are predominantly made up of ‘independent’ premises (not part of a chain of more than 1). These have been driving the decline in numbers between 2008 and 2018.
|Size of Parent Enterprise||2008 Number of Public Houses and Bars||2019 Number of Public Houses and Bars|
|2 to 249 units owned||6,155||3,225|
|250+ units owned||4,115||5,675|
Digging deeper, we also found that specifically independent premises with fewer than 10 employees have been significantly decreasing since 2008, plateauing in the last year. Whereas, independent units with 10 to 24 employees have actually been consistently increasing.
Although in much smaller numbers, and therefore not evident in the above chart, independent pubs and bars with more than 25 employees have increased by a staggering 219% since 2001.
|Parent enterprise||No. employees||2001||2008||% Change 2001 to 2008||2019||% Change 2008 to 2019||% Change 2001 to 2019|
|Independent||Fewer than 10||33,465||34,725||4%||21,600||-38%||-35%|
|Independent||10 to 24||3,580||4,705||31%||7,085||51%||98%|
|Independent||25 or more||485||665||37%||1,545||132%||219%|
From this data, we can state with some certainty that pubs with more staff are currently thriving. We can also speculate that this increase in staff means that these premises provide food as well as drink, as you need additional catering staff, waiting staff, managing staff, and possibly additional cleaning staff too, than simply staff behind the bar.
As a case study, the UK pub sector demonstrates how understanding revenue streams across an entire business, as well as how these revenue streams interact, is critical to growth. For example, serving food incurs a large upfront investment in kitchen facilities, products, and staffing costs, however, it can also help to secure profitable ‘drinking out’ revenue during a time of shifting consumer habits.
The UK pub sector is clearly still evolving, as businesses optimise their product to better meet the shifting demands of their customers. However, with the help of cost-to-serve analysis, more pubs can continue to analyse the relationship between their revenue streams, helping them to adapt and thrive in the face of future customer changes.
About the author
Ashleigh’s work focuses on the performance of data analysis and production of statistical models to derive insights.
Ash has worked with start-ups, defence contractors, retailers and the NHS to derive value from data and solve big problems.