A stroll through central London on any given night would give the impression that pubs are thriving as punters pile out onto the streets with a pint. A survey by the Office for National Statistics (ONS) last year found that a visit to the pub was the most popular leisure activity in the UK, with more than a third of respondents having visited one within the week. In 2016, of the £201 the average British household spent on leisure outside the house each month, £46.22 of this was spent on drinking while £86.57 was spent on eating. Over the past five years, spending on eating and drinking out has increased by 21 per cent. Now, as price inflation coupled with lack of wage growth begins to squeeze on incomes, pub companies are hoping that UK consumers will still prioritise little luxuries such as a trip to a pub in place of more extravagant treats.
Despite pub trips being the most popular leisure activity of late, it hasn't entirely been smooth sailing. The pub groups are beginning to suffer a headache of their own as a wave of cost pressures start to weigh on margins. Business rates are undergoing the first revaluation since 2010, and those pubs in London are set to see the highest spike in rates paid. The National Living Wage also came into effect over a year ago and, as of April 2017, has brought the minimum amount that staff can be paid to £7.50 per hour for those aged 25 and over. Meanwhile, companies with a wage bill of more than £3m will have to pay a levy of 0.5 per cent of gross wages each month.
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