This report intends to determine why pubs in the UK are increasingly transforming into gastro pubs.
The first part of this study will review recent statistics to give an overview of the pub sector’s position in the hospitality industry, to describe the size, scope and decline of this individual sector.
The second part will evaluate how macro factors have affected this industry, both in the last 10 years and currently, using PESTEL analysis. This analysis will then be used to forecast directions for the pub sector. The Palmerston, a pub turned gastro pub, will be referred to, to illustrate these findings and profitable recommendations will be made for the sector and The Palmerston
Although the report focuses on pubs, statistics used represent bars and nightclubs as these are commonly perceived to be the same sector. PESTEL factors have, where possible, been analysed in separate sections even though some can be related to one another.
Traditionally, pubs existed solely for selling alcoholic drinks as they represented a retail dimension for breweries (Market & Business Development (MBD), 2000). This has changed to pubs focusing on other features to attract customers, such as providing more entertainment and becoming a food-led outlet.
According to statistics from people 1st (2008), the pubs, bars and nightclubs sector is one of the biggest within the hospitality industry in terms of labour force size, number of enterprises and establishments and turnover (see appendix 1, 2 and 3 ). The majority of the workforce is part time and female (see appendix 4 and 5).
Although a large sector, pubs are in decline. Pub closures in the UK have increased to five every day partly due to dropping beer consumption (British Beer & Pub Association (BBPA), 2008). This market has seen a constant drop over the last 30 years with only one small rise in 1988 (see appendix 6).
Independent pubs are constantly adapting to keep negative impact to a minimum. As Blyth (2002) notes, many pubs are finding success when moving away from the traditional concept.
Past PESTEL Factors
After the successful smoking ban in Ireland, the UK Government announced plans for a smoking ban in 2004 (http://www.forestonline.org/output/Public-Smoking-Bans.aspx). Baker (2008) suggests a significantly higher proportion of adults were more likely to visit a smoke-free pub. However, some pubs did not agree with this so looked to change their image and concept.
Economical and Sociological:
A prosperous economy increased disposable income and improved standards of living. Huxley (2003: 8) highlights that “increasing number of women working and/or opting not to have children” had increased wealth. A report (Peach Factory, 2007) showed women dined out more than men and preferred casual dining formats hence a boom in such outlets. Pubs lost customers as lifestyle changes saw people spending more time in outlets serving good value food. Consequently, pubs looked to invest in becoming more food-led.
The introduction and improvement of satellite television allowed pubs to supply entertainment at their premises, attracting more customers (MBD 2000). Some pubs were unable to adopt this as licences proved too costly resulting in loss of customers.
Climate Change Levy, energy tax introduced in 2001, encouraged pubs to introduce energy-efficient measures to reduce energy consumption. Companies that cooperated were rewarded (caterer search, 2002).
Drug dealing was common in pubs as ample distractions allowed dealers to work (caterer search, 2001). Legislations, such as the Public Entertainment Licence (Drug Misuse) Act 1997, allowed licensees to prohibit drug dealing and thus improved the number of desired customers. Pubs sought to create more inviting premises.
The Palmerston recognised changes were important so closed...