Pub food feels the pressure
20 September, 2007
Consumers tightening their belts as eating out declines-
Pub food is facing a squeeze as rising interest rates and increased price competition from the restaurant sector hit trade.
The latest survey of the eating out market by analysts FMCG shows that the customer numbers in the value-for-money market have fallen, as increased mortgage payments keeps customers at home.
In all, 22 per cent on consumers said they expect to eat out less over the next few months.
David Humphreys, director of FMCG, said: “Given that eating out is largely discretionary expenditure, it is a lead indicator for the wider economy and the latest figures should be sounding a few alarm bells amongst policy makers.”
While older, more upmarket customers are still eating out, the figures suggest restaurants are dropping prices to attract these customers away from pubs.
This is most marked in the Midlands, where the North/South divide meets. In this area the total number of pub meals eaten has fallen this year, and pubs have also lost share of the total eating out market
“This is more likely the result of greater price competition than just the impact of the smoking ban,” said Humphreys.
“While average pub meal prices rose marginally in the Midlands between January and July, Midlands restaurant prices fell to narrow the gap on pubs.”