'Winners will be the businesses which are well run by experienced individuals'

Ortus was launched in early 2013 with an emphasis on pub finance. We have always done a lot more besides financing pubs, but it was our pub finance capability which caught the attention of brokers and brought in our first deals. This was fine because we’d always known a real USP would be needed to break into the crowded bridging finance market.

There were a lot of people who said we were mad. They believed the pub business was difficult, risky and the first to suffer in a downturn.

Of course, some pubs are difficult and risky, but we’ve always believed that a well-run pub managed by experienced operators stands a good chance at every stage of the economic cycle. A key reason for this has been the growth in pubs offering good quality food. These pubs don’t work everywhere - indeed a completely wet-let pub can be ideal for some locations - but it has changed the pub landscape and brought in a wider customer base for those pubs able to adapt.

It was therefore interesting to read the Propel Newsletter summarising the results of a recent YouGov/Horizons survey into the eating-out trends over Christmas. 

The report confirmed that 72% of people dined out in the two weeks leading up to Christmas 2015, up from 71% in the same period in 2014. The frequency that people ate out also increased, to 2.04 times in December 2015 from 1.94 times in December 2014. This paints quite a positive picture: More people eating out and doing so more frequently than before.

That said, people tended to spend less. In December 2014, the average spend by people eating out was £14.48, whereas in December 2015 they spent £14.07. This applied across all the age groups, apart from over 55s who spent £15.61, up from £13.84.

Like many surveys, the message is a mixture of both positive and negative - but for me, the most illuminating result was the reasons people gave for eating out. Traditionally, people only ate out on special occasions, but in 2015 only 27% listed it as a motivation. The most common reasons were meeting friends (30%), convenience (28%) and a desire not to cook (22%).

In many respects this supports our long-held view that pubs and restaurants are a more “staple” part of the British “shopping basket” than people think. Eating out is part of normal daily life and probably isn’t at the top of the list of things people give up if money is tight. The statistics appear to back this up. When respondents who said they hadn’t eaten out in the two weeks leading up to Christmas 2015 were asked why, only 27% cited expense - which is lower than the 29% who cited a desire to spend more time at home with their families.

However, it was interesting to see that 9% said they could eat more healthily at home. Although it’s only a small percentage, I expect this to increase, and pubs will come under pressure to adapt. This will become yet another challenge for the industry - just like the decline of wet-led pubs and the growth in food.

As always, the winners will be the businesses which are well run by experienced individuals. So, in one respect, nothing changes.

Attributed to Jon Salisbury, Managing Director at Ortus Secured Finance