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News Release

London

Strengthened confidence in Public House sector


  • Annual public house survey by Jones Lang LaSalle Hotels indicates stabilisation in the trading performance of the Public House sector at a micro level.
  • Research reveals strengthened confidence in the overall market performance with 61.4% strongly positive in the medium term.
  • 35% of respondents report no change in wet sales and only 9% reported a decrease, which is stark contrast to last year’s survey and may suggest the market is levelling-out.
  • Food sales have seen a decline of up to 14.9% - this is an area of the market where competition is becoming far more intense from a wide and diverse range of providers.
  • London, the South East and Home Counties retain their position as a trading hotspot, providing the greatest opportunity for capital growth.

London, 14th September 2012 - Jones Lang  LaSalle Hotels reveals that future expectations for trading performance across the Public House sector in the short and medium term are strongly positive at 38.7 percent and 61.4 percent respectively, a substantial increase on last years’ results indicating strengthened confidence in the overall market performance.

According to Jones Lang LaSalle Hotels’ survey of public house investors and owners, London, the South East and Home Counties retain their position as a trading hotspot, providing the greatest opportunity for capital growth.  In comparison to 2011, respondents are reporting a much more positive sentiment in terms of ‘wet led’ sales  with 35 percent of respondents reporting no change and only 9 percent reported a decrease of up to 9.9 percent in sales.

By somewhat surprising contrast, despite a decline in food sales of up to 14.9 percent reported in 2011, expectations for 2012 are most positive for food led businesses, with 29 percent of respondents identifying country dining and family food led businesses as areas for growth.

Harry Hawksby, Director in the Licensed Leisure and Hotels division at Jones Lang LaSalle Hotels, said:  “Whilst conditions remain challenging for the UK public house sector, respondents were far more optimistic about future trading performance than 12 months ago, especially in the medium-term, London and the South East.”

“Respondents expectations are more positive for “food led” businesses, championing it as a key growth area.  Sentiment suggests neutral results for those “wet led” business, moving us towards a more stabilised level of trade in a new “normalised” world, albeit at a much lower base level than historically.”

“Today’s consumers are more focused on value, which typically does not necessitate the need for cheap pricing, but the delivery of good value and a quality experience.  At a local level the consumer maintains a proportion of their weekly budget for leisure spends and will not completely forgo the social enjoyment and interaction of visiting their local pub.”

“It is not unsurprising to see the greatest positive sentiment focused on the South East, which has recently been the centre of a number of high profile events, although we will not know the full extent that these have on trade until next year’s survey and financial reporting.”

Public house investors were asked by Jones Lang LaSalle Hotels to comment on the issues and problems they expected to dominate the UK pub industry over the 12 months. Unsurprisingly, the respondents’ cite that Disposable Income/Austerity Measures and Off Trade pricing remain the biggest influential factors on the sector, closely followed thereafter by the beer duty escalator."


Hawksby concluded: “The next twelve months are likely to see the market continue to polarise, with public houses which offer food performing much better than their traditional alcohol-only counterparts.  Certainly there is an increasing supply of purpose built and branded family pub restaurants.”

“Values in the South East are being upheld and driven in part by alternative mixed uses, with freehold properties in London being particularly prized assets.”

“The outlook for funding is fragile and watchful eyes remain on the Eurozone economic crisis and until such time as there is a workable solution that provides proven stability in the markets, it is unlikely that there will be any change in the current availability of funds for the public house sector.  Well managed and capitalised businesses will continue to trade positively in this challenging market."​