The UK pub sector is a dynamic space, but it requires some untangling to make sense of the mixed bag of success and failure we have seen of late.

Over the past two years, the value of the market has grown impressively (up nearly 12%), despite a slowdown in overall consumer spending and a continuing decline in the total number of pubs.

So why are an average of 27 pubs a week closing, while others are thriving?

Deeper analysis reveals that the shining stars have been smaller players (those with a turnover under £25m) which saw their annual sales jump by 29% from 2010-15. The pub chains are also doing well. Partly benefitting from consolidation, they have a collective growth rate of 13% from 2010-15.

An underlying factor has been oversupply. Operators are recognising this and are focusing their propositions. Punch Taverns reported average profit growth of 3%, as it disposes of `non-core’ pubs and focuses on a strategy of community, high street and destination. Success now comes from effectively managing estates. In a bid to focus on the most lucrative locations, creating destinations is the objective. ‘Drive-to’ sites have become increasingly popular, with Marston’s building more than 100 new destination pubs over the past 5 years.

Operating over all dayparts is now crucial to a pub’s success. The closure of many nightclubs has presented an opportunity for pubs to become evening destinations. Many are also venturing into the increasingly popular breakfast daypart, with consumption of the first meal of the day in pubs up 128% since 2008.

While many pubs struggle to adapt to the changing tastes of younger consumers, others have been more agile in diversifying their offer. Wetherspoon, for example, are now serving small plates, salads and world flavours – and have recently seen a 3.8% growth in like-for-like sales. Urban pubs often have a particular focus: families or sport, for example, while community pubs need a broader offer to accommodate a diverse range of customers.

Our work in F&B has revealed how the lines between eating and drinking are becoming increasingly blurred. Pubs need to continue to diversify and improve their food offer further to compete with restaurants, as well as offering evening events and late licenses. In the future, the term ‘pub’ will stand for many different things, as we see operators continue to evolve to remain firmly fixed in our repertoires and find a sustainable position in a competitive market.

Ailis Topley