The Changing World of Eating Habits
In early 2013 Ortus was launched with an emphasis on pub finance. We have always done a lot more besides finance pubs, but it was the pub finance capability which caught the attention of brokers and brought in our first deals. And this was fine, because we’d always known a real USP would be needed to break into the crowded bridging-finance market.
However, there were lots of people who said we were mad. There was a feeling that pubs are difficult, risky and the first businesses to suffer in poor economic conditions.
Of course some pubs are difficult and risky, but we’ve always believed that a well-run pub managed by experienced operators stands a good chance of in every stage of the economic cycle. A key reason for this has been the growth in pubs offering good quality food. These pubs don’t work everywhere … indeed a completely wet-let pub can be ideal for some locations … but it has changed the pub landscape and brought in a wider customer base for those pubs able to adapt.
It was therefore interesting to read the Propel Newslettersummarising the results of the recent YouGov/Horizons survey which studied some of the eating-out trends over Christmas.
The report confirmed that 72% of people ate out in the 2 weeks leading up to Christmas 2015, up from 71% in the same period in 2014. The frequency that people ate out also increased from 1.94 times in December 2014 to 2.04 times in December 2015. So, this paints quite a positive picture: More people eating out, and doing so more frequently than before.
That said, people tended to spend less. In December 2014 people spent on average £14.48 when they ate out, whereas in December 2015 they spent £14.07. This applied across all the age groups, apart from over 55s who spent slightly more … £15.61, up from £13.84 in December 2104.
Like many surveys, the messages are a mixture of positive and negative, but for me the illuminating result is the reasons people gave for their eating-out behaviours. Traditionally people would eat out on a special occasion, however in 2015 only 27% of people listed this as their reason for eating out. The most common motivations were meeting friends (30%), convenience (28%), and a desire not to cook (22%).
This in many respects supports our long-held view that pubs and restaurants are a more “staple” part of the British “shopping basket” than people think. Eating out has been absorbed into normal life and probably isn’t at the top of people’s list of things to give up if money is tight. The statistics seem to back this up. When respondents who said they hadn’t eaten out in the 2 weeks leading up to Christmas 2015 were asked their reasons, only 27% cited expense as the reason. This was lower than the 29% who cited a desire to spend time at home with their families.
However, it was interesting to see that 9% had said that they could eat more healthily at home. Although it’s a small percentage, I expect that this will grow as a motivation and pubs will come under pressure to adapt. This will be another challenge for the industry … just like the decline of wet-led pubs and the growth in food.
As always, the winners will be the businesses which are well-run by experienced individuals. So, in that sense, nothing changes.