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On-trade booms but competition for consumers is increasingly cut-throat, new report shows

Published:  03 December, 2015

The out-of-home leisure market is currently worth £145 billion, but pubs are increasingly having to compete with other venues for customer spend, according to a new report published today.

The pub remains the preferred out-of-home leisure activity, with 47% of consumers visiting weekly, the Carlsberg UK Consumer Insights Report says.

Visits to coffee shops are up 5% over the last five years and visits to restaurants up 4%. Other leisure activities, such as shopping or the gym, are also gaining in popularity, particularly among millennial consumers.

The number of at-home occasions is also rising, driven by both the explosion in entertainment technology and the growth of "dine-in-for-£10"-style supermarket deals and premium home-dining ranges.

Weekly alcohol occasions have fallen by 22% in the on-trade since 2001 across all age ranges.

Beer still accounts for 43% of the value in the on-trade, but non-alcoholic drinks are increasingly popular, with teetotallism growing among millennials.

Some 81% of consumers want to moderate their alcohol intake.

The long-term decline of the on-trade appears to have been halted by the rise of food-led venues, however, with openings of the latter up 4.5% and 65% of consumers saying that a food-led pub or restaurant is their preferred choice of venue.

This is driven in part by the increasing role of the family in the on-trade. Around 14% of adults say they visit pubs weekly as a family, and 33% monthly.

The growing range of choices in the on-trade means consumers are rarely loyal to a handful of venues.

Overall, 70% of consumers visit five or more on-trade venues over the year. That rises to 77% among millennials and 80% among families.

Quality of food is now the key driver for choice of on-trade outlet, with 79% ranking it highly, edging out value for money and cleanliness, both of which were cited as decisive factors by 78%.

For the millennial generation, free wifi and late opening are increasingly important, scored at 8/10 or higher by 41% and 46% respectively.

Consumers are increasingly experience driven - especially the millennial generation - with 60% citing new experiences as a factor in choice of venue.

The pub quiz is the favourite on-trade experience for 45% of consumers, with cuisine evenings at 37% and cooking lessons at 18%.

Fully 66% of consumers agree that  "entertainment should be about learning new things as well as having fun".

Digital platforms are increasingly central to consumer decision making. When planning food occasions, customers look to review sites. For drink occasions, social media is the preferred source of information.

Some 63% of consumers consider word of mouth the most important factor in choosing a pub.

In terms of budget, 9% of consumers spent £30 or more in the on-trade on weekdays, rising to 31% at weekends.

The number of women visiting the on-trade is up 1.1% since 2011, with 23% of women now going to the pub weekly.

As many as 75% of all pub-goers watch football, with one-third of those being highly engaged. However, over-crowding is an inhibiting factor: 75% of respondents said they would be more inclined to watch football in a pub if there were no queues at the bar.

David Scott, director of brands and insight at Carlsberg UK, said: "The British on-trade has faced its fair share of adversity in recent years, confronted with recession and fragile consumer confidence, so it's enormously encouraging to report a rise in spending and confidence growing - now driving the channel.

"While the Carlsberg UK Consumer Insights Report highlights new and on-going challenges for the UK pub, the study also delivers key insight to trends and opportunities, including value in sport or all-day dining in pubs, and an in-depth understanding of today's pub-goer.

"For example, we know that four in five people are now really thinking about their alcohol habits and plan to moderate their drinking - a significant consumer movement and opportunity for pubs..

"As a brewer and drinks wholesaler the needs of our customers are at the heart of everything we do, and while the Great British pub prevails, our commitment is to ensure we're providing insight to keep them one-step ahead.

"The on-trade environment is ever-changing and the variety of occasions and options available to consumers continues to grow, meaning we need to work with pubs nationwide to provide reasons to visit, and return."