Friday, 23 May 2008

The tipping point

This is an interesting report on comments by the chief executive of Mitchells & Butlers in which he says we have now reached a tipping point in terms of value for money between the on and off-trade. Up to a point, people have been prepared to pay more in the on-trade for atmosphere and conviviality - and, for some, the availability of cask beer - but the latest duty hike combined with the economic downturn are likely to push many drinkers over the edge. Already, much of the serious session drinking that used to take place in pubs has moved to private homes (and has also by and large moved from draught bitter to canned premium lagers).

Now, even ordinary social drinking is being called into question when in many outlets just a couple of pints will set you back over a fiver. I’m not exactly on the breadline, yet I do wonder where some of the people who seem to be in pubs most nights of the week get the money from. This is yet another factor that raises serious doubts over the long-term prospects for the wet trade in pubs. Maybe operators will have to realise that the days of year-on-year above inflation price rises are over, and they need to look at shifting many outlets to more of a “value proposition” along the lines of Samuel Smith’s and Holts.

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