1 Cautious confidence among business leaders
After plunging during 2020, the confidence of pub, bar and restaurant leaders is starting to recover. The third-quarter Business Confidence Survey from CGA and Fourth found that more than two thirds of (70%) business leaders feel optimistic about their prospects for the next 12 months. Major challenges around recruitment, rising costs and disruption to supply threaten to dampen that confidence, but hospitality’s long-term future remains positive.
2 Momentum in sales
The UKHospitality Quarterly Tracker shows that the industry lost just over £100bn in sales in the 15 months to June 2021, but there are signs that pubs and bars have built back well over the summer—especially in the managed sector. The August edition of the Coffer CGA Business Tracker showed that leading pub groups grew sales by 3% on the same month in 2019, while bar groups surged 21%—raising hopes for a strong end to 2021 trading.
3 Core customers bouncing back…
CGA’s BrandTrack data shows the most frequent visitors to pubs and bars came back quickly after reopening in the Spring, and have kept up their previous frequency of visits. Those who visited premises in the first few weeks of reopening spend an average of £94 on eating and drinking out each month, compared to just £58 among those who didn’t go back in that time.
4 …But some watching their spending and safety
Not everyone is spending freely, and COVID-19 has taken a toll on the nation’s disposable income. A quarter (26%) of consumers said in August that their household income has fallen since COVID-19 hit, and one in ten (10%) has faced financial hardship. There are occasional concerns about safety too, with 5% of consumers saying they have felt unsafe during On Premise visits in the summer.
5 Up-tempo occasions returning
Nightclubs and late-night bars were the first On Premise segments to go into lockdown, and the last to come out of it—and consumers have missed them. Around a fifth (22%) said they now planned to visit nightclubs more than they did in 2019, and nearly as many (20%) said the same of cocktail bars.
6 Cocktails helping spirits to thrive
Many of those rushing back to pubs and bars have been celebrating with cocktails—sales of which have outstripped 2019 levels most weeks since reopening. This has helped spirits to grow their share of drinks sales by more than two percentage points—partly at the expense of wine, which has lost just over one point of share.
7 No and low alcohol drinks poised for growth
With more than two thirds (70%) of consumers now saying they proactively try to lead a healthy lifestyle, and even more (75%) believing it is important to have healthier options available in restaurants, pubs and bars, the low and no alcohol drinks market is well placed for growth. More than a third (36%) of people say they have drunk no and low options over the last year—up by four percentage points since 2019—with mocktails and virgin cocktails most popular.
8 Polarisation in range
With many people spending freely after lockdown and others watching the pennies, people’s drinks choices are increasingly polarised. This is highlighted by CGA research showing that the proportions of people who think it is more important that their drinks are high quality than it was before COVID-19, and who think good value is more important, are exactly the same at 33%. Polaristation puts pressure on pubs and bars to find the right range of drinks, and potentially squeezes the middle ground.
9 Local habits
While some workers are now returning to their commutes, others will be taking the habit of remote working into the future; more than two thirds (70%) think they will be based at home more than they were before COVID-19. This will challenge the city-centre market, but it’s good news for pubs in more residential areas, especially the suburbs.
10 New opportunities in planning and booking
The pandemic has led consumers to plan their out-of-home meals and drinks in greater detail—and that opens up good opportunities to engage at multiple digital touchpoints. More than a quarter (29%) of consumers are now more likely to pre-book tables for drinks than they were before COVID-19, and there is the chance to pre-sell and influence decisions at this stage of the journey.
CGA’s deep research into pub and bar trends and consumers’ changing habits since reopening can help drinks suppliers and operators establish the right ranging, pricing and marketing strategies. To learn more, email mark.jackson@cgastrategy.com.
