Could 2015 be the year to focus on pubs?
Ask any Londoner about the state of pubs in the capital, and they will likely tell you the same thing: The great British pub is on its way out. While the number of pubs is clearly decreasing, there is a new trend amongst the British public the pub’s resurgence, albeit in a slightly different form.
If you are a restaurateur or leisure industry investor, 2015 could be the year to focus on pubs.
According to the Campaign for Real Ale (CAMRA), over 5,500 pubs have closed in Britain since 2008, with 18 closing per week. A number of factors can be cited: the recession increased tax on beer, the ban on indoor smoking in public buildings, and the affordability of supermarket beer.
CAMRA’s Jon Howard suggests that the state of modern pubs – a British institution – is “quite a sad situation”. But all hope is certainly not lost, and thanks to a resurging economy and a newfound aesthetic, the pub is bouncing back. Investors have seen a gap in the market, and are rushing to fill it with the new breed of pub.
Perhaps one of the first examples of this is The Rake. Sitting just on the edge of Borough Market, owners Richard Dinwoodie and Mike Hill opened The Rake in 2006 as a shop front for their Utobeer wholesale business. However, the bar became so successful that it became its own stand-alone business.
One of the main reasons for its success is its focus on high-quality beers. There are 130 beers behind the bars at any given time, along with ciders and wines, and the food is kept to the bare essentials: pork pies, crisps and olives. It’s a simple offering, but it facilitates the right atmosphere for reverent beer appreciation. This marriage of high quality and simplicity has spread across the capital, generating the new generation of London pubs.
The next real milestone for the resurgence of the pub came with the opening of The Craft Beer Co.’sLeather Lane stronghold. Again, it focuses on high-quality beer, and sells simple food such as pork pies and scotch eggs, but does not allow the food to compromise the drinking experience.
In April 2007, BrewDog was founded by James Watt and Martin Dickie, and their beers became a worldwide sensation. Fast-forward to 2011, and BrewDog had opened their flagship Camden venue along with a number of other UK – and worldwide – venues.
The popularity of the new breed of pub is rapidly expanding, and much of this is thanks to a new breed of brewers and microbrewers. The Kernel, Beavertown, London Fields Brewery, Late Knights Brewery are all good examples.
In addition to what we have already discussed, many pubs have also gone down the margin-rich gastro-pub route. This has opened up a second market in the pub industry, where good food and a more family-oriented experience takes centre stage. A good example of this is Marston’s, where the menu, beers and environment come together in a cohesive, friendly experience.
Investing in London restaurant property for the purpose of opening a gastro-pub is a popular move in the current economic climate, where priority is placed on value.
The fact that high-quality craft beer-oriented pubs like The Longroom Pub have proliferated here in 2015 at a time where gastropubs like Marston’s and Chelsea’s new The Cross Keys are also thriving just goes to show that there is a new vibrancy in the current pub market. This spells new opportunity for operators and investors.
Traditional restaurant chains like Brasserie Blanc are also finding room to manoeuvre into the pub space thanks to the new diversification of the pub market in London and affluent suburbs with their White Brasserie pubs. The chain’s trademark “seasonal British food with a French twist” remains intact, but a broad selection of beers and ales, along with high-quality wine make the White Brasserie pubs a relaxing, atmospheric and low-pressure environment. Perfect for those with families.
So what does the London pub market look like in 2015? Despite earlier predictions that pubs were declining, the end of the recession, the upsurge in craft beers, and the gastro-pub phenomena have reversed the trajectory of this important British establishment.
This should be good news for potential restaurateurs looking to invest in pub property. With a growing market for fine beers and fine food, and with the London and wider UK economy surging, now is a good time to be in the pub industry. For expert advice on all parts of the restaurant and leisure property buying or selling process, contact one of our expert advisors.
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