benchmarking success...almr christie & co benchmarking report 2017 -only authoritative survey of...

Benchmarking Success

Kate Nicholls

Chief Executive

ALMR

Neil Morgan

Managing Director – Pubs & Restaurants

Christie & Co

Highlights of the ALMR Christie & Co

Benchmarking Report 2017

ALMR Christie & Co Benchmarking Report 2017

- Only authoritative survey of its type

- Launched 2007 – 11 surveys now undertaken

- Objectives:

- Critical performance indicators for sector

- Benchmarking your own performance

- Operator evidence for business valuations

- Messages to Government and suppliers

Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 2

Survey Participants

- 55 companies - 69% respondents SMEs

- Almost 6,000 outlets across all trading styles

- 60% leasehold

- 86:14 commercial : industry


Respondents by Operating Type


Comparison of survey respondents to England & Wales outlet universe

11%

26%

32%

17%

4%2%

8%

15%

22%

32%

26%

1%3%

2%

0%

10%

20%

30%

40%

50%

Community Local Food-Led Casual Dining High Street Licensed

Accommodation

Nightclub Wine Bar

Outlet Universe

Survey Respondents

Source: CGA Strategy, ALMR Christie & Co Benchmarking Survey

Market Trends & Dynamics


England & Wales managed outlet universe as a percentage of total outlets

Community Local, 16%

Food-Led, 38%

High Street, 25%

Licensed

Accommodation, 6%

Nightclub, 3%

Wine Bar, 12%

0%

10%

20%

30%

40%

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: CGA Strategy, Christie & Co Research and Analysis



Long-term trends in food and wet sales

0

20

40

60

80

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Pe

rce

nta

ge

of

To

tal

Re

ve

nu

e

Wet sales

Food sales

Linear (Wet sales)

Linear (Food sales)

Source: The ALMR Christie & Co Benchmarking SurveySource: The ALMR Christie & Co Benchmarking Survey


Long-term trends in other revenue

0

1

2

3

4

5

62

00

6

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

Pe

rce

nta

ge

of

To

tal

Re

ve

nu

e

Accommodation Machine income Other revenue

Source: The ALMR Christie & Co Benchmarking Survey



Like-for-like growth by market segment

0.6%0.7%0.7%

1.1%1.3%

2.7%

3.6%

5.1%

0%

2%

4%

6%

Casual DiningHigh StreetFood-LedEntire SurveyWine BarCommunity

Local

NightclubAccom-

modation




Like-for-like annual percentage change in turnover

3.7%4.3%

-1.8%

3.4%3.0%

4.9%

5.8%

4.8%4.2%

3.1%

1.1%

-4%

-2%

0%

2%

4%

6%

8%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016




Like-for-like growth by market segment – rebased from 2008

80

100

120

140

160

2008 2009 2010 2011 2012 2013 2014 2015 2016

Community Local Food-Led High Street Entire Survey RPI


28%

5%

3%

7%

6%

3%

Payroll costs

Entertainment costs

Utility costs

Operations costs

Premises costs

Other ongoing costs


Operating Costs


Operating costs as a percentage of turnover

27.9%

5.3%

2.8%

6.6%

5.8%

3.2%

Payroll costs

Entertainment costs

Utility costs

Operations costs

Premises costs

Other ongoing costs


Operating Costs


Operating costs (excl. payroll costs) – percentage of turnover

0%

2%

4%

6%

8%

10%

2009 2010 2011 2012 2013 2014 2015 2016

Entertainment costs Utility costs Operations costs Premises costs Other ongoing costs


Costs by Market Segment


Operating costs as a percentage of turnover by market segment

0% 10% 20% 30% 40% 50% 60%

Community Local

Food-Led

Casual Dining

High Street

Licensed Accommodation

Nightclub

Wine Bar

Entire Survey Payroll costs

Entertainment costs

Utility costs

Operations costs

Premises costs

Other ongoing costs




Operating costs as a percentage of turnover by market segment

20%

30%

40%

50%

60%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Community Local Food-Led High Street

Source: The ALMR Christie & Co Benchmarking SurveySource: The ALMR Christie & Co Benchmarking Survey

Rent Costs


Leasehold estate rent as a percentage of turnover

0%

2%

4%

6%

8%

10%

12%

2008 2009 2010 2011 2012 2013 2014 2015 2016

Source: ALMR Christie & Co Benchmarking Survey



Rent levels by market segment

9.7%

8.5%

10.2% 9.7%10.5%

10.0%

12.4%

9.4%

8.0%

9.1%

7.5%

9.5%8.8%

7.7%

11.2% 11.1%

8.5% 8.4%

0%

2%

4%

6%

8%

10%

12%

14%

Community Local Food-Led Casual Dining High Street Licensed

Accommodation

Nightclub Wine Bar Entire Survey Average Pub

Company Lease

per the RICS

2015

2016

Source: The ALMR Christie & Co Benchmarking Survey, the RICS

Costs by Agreement Type


Operating costs - tied leases vs commercial leases

28.2%

4.5%3.0%

6.2% 6.2%

2.0%

29.2%

3.2% 2.8%

7.2%

5.2%

2.8%

0%

5%

10%

15%

20%

25%

30%

Payroll Entertainment Utilities Operational Premises Other

Estates with Majority Tied Leases Estates with Majority Commercial Leases


Costs by Agreement Type


Rent costs as percentage of turnover by agreement type and year

9.4%

10.9%

12.3%

10.7% 10.6%

9.2%8.7%

11.4% 11.6%

10.7%

9.0%

10.4%

9.3%

8.4%

0%

2%

4%

6%

8%

10%

12%

14%

2010 2011 2012 2013 2014 2015 2016



Capital Expenditure


Capital expenditure as a percentage of turnover

6.1%

2.2%2.4%

3.2%

5.3%

2.9%

3.7%

4.1%

6.1%

0%

1%

2%

3%

4%

5%

6%

7%

2008 2009 2010 2011 2012 2013 2014 2015 2016


Capital Expenditure


Capital expenditure as a percentage of turnover by tenure and market segment

7.3%

6.4%5.9%

6.8%

5.9%5.7%

4.9%

6.1%

6.7%

5.2%

0%

2%

4%

6%

8%

Community

Local

Food-Led Casual

Dining

High

Street

Licensed

Accom-

modation

Nightclub Wine Bar Entire

Survey

All

Leasehold

All

Freehold


Gross Profit Margin


Evolution of food and wet margins

50%

55%

60%

65%

70%

75%

2008 2009 2010 2011 2012 2013 2014 2015 2016

Gro

ss

Pro

fit

Ma

rgin

Wet sales gross margin Food sales gross margin


Gross Profit Margin


By market segment

65%68%

71%68% 67%

73%

64%67%

59%63%

69%

63% 62%

55%

62% 64%

0%

20%

40%

60%

80%

Community

Local

Food-Led Casual Dining High Street Licensed

Accommodation

Nightclub Wine Bar Entire Survey

Wet sales gross margin Food sales gross margin


Gross Profit Margin


Tied leases vs commercial leases

62%

68%71% 69%

40%

50%

60%

70%

80%

Wet Margin Food Margin



Messages to Government - Legislative Costs


Operations costs as a percentage of turnover

0%

1%

2%

3%

4%

5%

6%

7%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


Messages to Government - Premises Costs


Premises costs as a percentage of turnover

0%

5%

10%

15%

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016


Confidence and Outlook


Impact of Brexit on 2017 performance

2%

27%

64%

7%

0%0%

10%

20%

30%

40%

50%

60%

70%

Significant ContractionModerate ContractionBroadly FlatModerate GrowthSignificant Growth




Perceived accuracy of business rates revaluation

0%

7%

30%

39%

25%

0%

10%

20%

30%

40%

50%

60%

70%

Significantly

undervalues

Moderately undervaluesBroadly reasonableModerately overvaluesSignificantly overvalues




Passing on the costs of National Living Wage to consumers

9%

33%

44%

9%

4%

0%

10%

20%

30%

40%

50%

60%

70%

N/A - no material

increase in costs

Cost increases fully

absorbed

Up to half of the cost

increases passed on

Most of the cost

increases passed on

Cost increases fully

passed on




The Pubs Code – preference between tied and free-of-tie leases

11%

53%

37%

0%0%

10%

20%

30%

40%

50%

60%

70%

Remain tiedMixed, depending on each

asset

Free-of-tie Uncertain


How ALMR uses the information

- Operator evidence for business valuations

- Valuation Office 2015 Business Rates Review

- RICS Valuation Guidance

- Campaigning

- Employment Policy

- Tourism Strategy & VAT

- Messages to Government

- Low Pay Commission

- Licensing Live Music

- Gaming Machine Taxation


Contact

Christie & Co

Neil Morgan – Managing Director – Pubs & Restaurants

[email protected]

Ted Darley – Director – Hospitality

[email protected]

Ramzi Qattan – Associate Director – Consultancy

[email protected]

The ALMR

Kate Nicholls – Chief Executive

[email protected]

David Sheen – Policy and Research Director

[email protected]

Lina Olea – Membership Marketing Manager

[email protected]

benchmarking success...almr christie & co benchmarking report 2017 -only authoritative survey of...

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