The Pub Sector will steal market share unless Restaurants step up innovation and marketing
Pubs and restaurants are moving much more closely together creating a market where there is too much capacity and not enough demand. Many pub operators are managing to keep their offer fresh with new ideas and innovative marketing techniques. If restaurant operators don’t do the same they will lose their market share – some could go out of business.
The UK's restaurant sector will start feeling the squeeze more acutely unless it follows the example of leading pub operators, many of whom are investing heavily in marketing and new innovations to keep their offer fresh.
On-going research from Horizons shows that consumers are beginning to feel the credit crunch and they are starting to cut back on discretionary spend - including eating out. When they do eat out they will increasingly be looking for value-for-money, reliable service, good quality food and something that offers them what they want, when they want it. Competition in the high street has never been more aggressive, and restaurants have got to work twice as hard in order to retain their market share.
As a result, restaurants need to ‘sweat their assets' more to improve their bottom line. Trading throughout the day, improving operating efficiencies so fewer people do more work and reducing staff turnover can all help boost profitability.
Last year's smoking ban gave many pub companies a wake-up call to work harder at attracting customers and give them more reasons to visit. Leading pubs have now improved the quality of their food by cooking more from scratch, using locally sourced ingredients.
Others have broadened their appeal by opening for breakfast, morning coffee, afternoon tea and early evening meals. Some have even introduced a retail element - one former family pub in Surrey now features a popular farm shop alongside its gourmet food offering, ‘Aga breakfasts' and morning coffee. We are also seeing an active range of promotions in pubs that include themed evenings, free desserts, free wi-fi connection, organic and locally-produced food.