On-trade

Lending to pubs up 65%

Some 85% of turnover in Irish pubs last year was derived from domestic customers, with 5% coming from each of the UK, the US and ‘the rest of the world’.

In its 2018 Pubs Outlook AIB finds a 6% increase in spend by customers in Irish pubs in the 12 months to the end of October 2017. And despite a decline in UK visitor numbers UK visitor spend was up 6% while spend from US visitors was up 9% with the rest of the world up 5.5%.

The report also flagged a 6% increase in turnover in card sales for the pub sector for 2017 with a 17% jump in the total number of card transactions.

 

Food

Food was a key driver of growth for the period, with food service in pubs reaching €982 million in 2017, up 3% year-on-year and now accounting for 37% of the total foodservice market here. This is projected to grow 7% by 2020 and Irish publicans are accepting card payments in growing numbers, with some city centre pubs now achieving 80% of their turnover from credit and debit cards according to Visa.

The report also found that some parts of the country – such as Donegal (where UK trade comprises 16.4% of the total pub trade) and Mayo (UK trade comprises 9.6%) – had a much heavier reliance on the tourism trade than other parts.

“We can see that the overall risk of Brexit on the pub sector is not excessive and the market actually grew over the past 12 months despite a decline in UK visitor numbers,” stated AIB’s Head of Hospitality & Tourism at the bank’s Retail & Business Banking section David McCarthy, “Some pubs do have a higher level of exposure to UK visitors and they need to be mindful of the implications of further Sterling devaluations and any potential future travel restrictions post Brexit.

“On the back of strong economic growth, buoyant consumer sentiment, falling unemployment and a record year for tourism numbers, the Irish pub sector is performing strongly and there is a sense of optimism within the sector not seen for many years,” he stated.

He also pointed out that most of the legacy debt issues which had been overhanging the sector for the past decade have been addressed and this has led to greater stability and clarity in the market.

“According to the CSO new lending to the pub sector has increased 65% to €86m in the 12 months to the end of September 2017,” he stated, with debt levels in the pub sector decreasing by around 61% or €1.4 billion since September 2011.

 

 

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