Trends in the pub industry
The British pub industry includes approximately 60,000 pubs that fall into three categories: managed (operated by a manager), leased/tenanted, and individual (operated by the owner) pubs (Mitchells & Butlers, 2005). The British Beer & Pub Association reports that “in the last 10 years food sales in Britain's 30,000 managed pubs have risen by 165%”, with smaller increases posted by the smaller 30,000 pubs (Bowers, 2005).
The British pub has traditionally fulfilled a variety of roles, serving both as a point for informal communication, a social venue for watching sports games or playing indoor sports, or even a family get-together. Although recent scandals concerning “binge drinking and town centre rowdiness in 2004” attracted the attention to the pub as a source of such antisocial behaviour, its role in British society has traditionally been much broader (Mintel, 2004).
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In any case, exposure of pubs to negative publicity has led to strengthening of governmental regulations concerning the sector. The current fight in the pub industry is against “the government's health bill exempting non-food pubs from a proposed smoking ban” (Bowers, 2005). This supposedly creates an uneven playing field for bars that serve food since they have to restrict smoking on their premises.
At the same time, the proportion of pubs offering food service rose from about 50% in the 1990s to roughly 80% (Bowers, 2005). Owners and operators of bars subject to the smoke ban point to the fact that it will disadvantage food-serving bars, since the proportion of smokers among pub visitors is estimated by the British Beer & Pub Association to be in the range of 40-50% - about “twice the national average” (Bowers, 2005).
The economic landscape in the UK is favourable for spending since consumers feel confidence in the economy. At the same time, pubs can be affected by the growing popularity of healthy lifestyles that includes a greater number of people “who simply want a quiet (or lively) drink in the comfortable, friendly type of pub that is permanently attractive for foreign tourists as well the British themselves” (Mintel, 2004). More and more people will treat bars not simply as venues for drinking; on the contrary, they want to have meals there.
Pubs begin to dissociate with rowdiness that tainted their image and emerge as credible eating establishments can be attributed to the industry’s attempts to appeal to a wider section of the market due to competition from supermarkets, government regulation and societal changes including a more health conscious consumer. Bright, open interiors and smoke free environments make them more appealing to such consumers and the female audience.
However, alcohol sales remain the driving force of profitability in bars. In this area, consumers now seek a higher quality experience. One of the trends is increase in wine sales, attributable in part to the simple addition of ice to the drink (Solley, 2005). According to the National Office of Statistics, champagne is now one of the most regular purchases in the UK, particularly non-vintage and rosé lines. The growth has been attributed to younger drinkers who treat champagne as less a drink solely for special occasions (Bill, 2006). Still, the British Beer & Pub Association (2003) reports that “in the UK 28 million pints of beer are consumed every day, which equates to 100 litres per head each year - compared to 20 litres of wine per head”.
Positioning - A bar with a difference
The proposed bar on Lisburn Road will seek to differentiate itself from other bars in the city by offering a high quality customer experience catered to the tastes of a more exclusive clientele. The competitive advantage of the facility will be the provision of excellent service and superior food and drink not available in other establishments; focusing on these features, the bar will not engage in price competition.
The wide assortment of traditional drinks will be complemented by a meticulously selected wine list including champagne varieties, locally produced cider and ale and a selection of less common malt whiskeys. Customers will be informed of the wide variety of drinks through wine and whiskey tasting promotions. The bar will appeal to health-conscious consumers with by offering low-cost meals from a standard menu prepared with the finest locally sourced ingredients. The emphasis on social experience, quality food, and large choice of drinks will be distinctive features of the new bar.
The new bar will target the following groups in the target market:
Professionals coming in after work to have a few drinks and chat with colleagues after a long working day
Couples looking for a pleasant social experience, dinner and sometimes a bottle of wine
Students occupying the bar in the day-time and in the evening to enjoy a get-together and discuss class assignments
WOOFS (well-off older folks) enjoying their post-retirement life and spending some of their time in local bars to have a pleasant dinner
DINKS – couples without children but with a high income that permits them to allocate a large portion of their income to dining.
Overall, the target audience will include individuals with high disposable income, high expectations of service, food quality and drink variety, and preference for establishments with style.
Bowers, S. (2005, October 28). Smoking ban is unworkable, says pub industry. Guardian. Retrieved April 29, 2006, from http://society.guardian.co.uk/health/news/0,,1602801,00.html
British Beer & Pub Association (2003). Beer and Pub Facts. Retrieved April 29, 2006, from http://www.beerandpub.com/content.asp?id_Content=704
Mintel International Group Ltd. (2004, August 1). Pub Visiting – UK. Retrieved April 29, 2006, from http://www.marketresearch.com/product/display.asp?productid=1037778&g=1
Mitchells & Butlers. (2005). Pub Operating Models. Retrieved April 29, 2006, from http://www.mbplc.com/index.asp?pageid=425
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