Further consolidation likely in UK pub sector as pandemic leaves questions about the future of pubs
The Interview — which started with an overview of the sector’s structure — offered a trading update, as well as an overview of the competitive landscape and a medium-term industry pub outlook.
As is to be expected, some food venues have enjoyed “very good trade” since restrictions were first imposed, offering hope for the future of pubs; players such as Lounges posted a 30% increase like-for-like at the end of September.
“A lot of that was supported by the ‘eat out to help out’ [scheme] and the VAT passing on, but they saw a huge uptick, whereas pure drinking venues and late-night venues really, really suffered, so we saw a whole platter of things,” the expert said. Community-driven establishments have also done particularly well, the Interview confirmed, with more people working remotely and seeking leisure time close to home after a long day.
The Future of pubs in 2021 and beyond
In other observations, the expert believes that “we’re over the threshold of ordering by app now”, with labour likely to be a big area of focus for businesses once things begin to settle. Meanwhile, “there’s definitely going to be consolidation” as conditions normalise. Indeed, “there does seem to be a lot of private equity money that’s interested at the moment and may capitalise on the weak share price that’s been seen within the industry, because, obviously, share prices are reflective of a closure period.”
But as the specialist pointed out: “It’s not as though pubs are closed permanently. It’s a short-term dip in income that’s affected the share price as opposed to the permanent closure.”
Other talking points included the Chancellor of the Exchequer Rishi Sunak’s new support package, supply-chain disruptions created by repeated openings and closures of pubs, and how industry dynamics and how the future of pubs’ pricing could be impacted by consolidation.
To access all the human insights in Third Bridge Forum’s UK pubs – trading update & 2021 outlook Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
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