ALMR Report shows future for pubs is stablilizing

07/07/2011

The Association of Licensed Multiple Retailers’ (ALMR) latest report finds that pub operating costs are stabilizing for the second year in a row.

“Cost control is a critical determinant of business profitability – particularly in the pub sector where it is a key variable in rent and valuation calculations,” said Kate Nicholls, ALMR strategic affairs director.

“Operating costs as a percentage of turnover had been climbing steadily over the five years we have carried out the survey, peaking at 51 per cent at the height of the recession.

“These findings suggest the sector is back on track and has a strong base from which to grow. Better cost control has been particularly marked in the food-led segment of the market and has contributed to higher margins – up 14 per cent – and improved profitability as a result.”

The Report – which benchmarks operating costs, business performance and market trends – shows that investment in the pub sector is back on track, with average capital expenditure (capex) of 2.5 per cent of turnover.

The trend in like for like sales also continues to improve – up by 3 per cent in the year to October 2010 compared with a fall of 1.8 per cent in October 2008. Companies with fewer than 10 outlets recorded the highest levels of growth of 5 per cent and over.

 

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