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
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 3
Respondents by Operating Type
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 4
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
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 5
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
Market Trends & Dynamics
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 6
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
Market Trends & Dynamics
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
Market Trends & Dynamics
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 8
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
Source: The ALMR Christie & Co Benchmarking Survey
Market Trends & Dynamics
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 9
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
Source: The ALMR Christie & Co Benchmarking Survey
Market Trends & Dynamics
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 10
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
Source: The ALMR Christie & Co Benchmarking Survey
28%
5%
3%
7%
6%
3%
Payroll costs
Entertainment costs
Utility costs
Operations costs
Premises costs
Other ongoing costs
Source: The ALMR Christie & Co Benchmarking Survey
Operating Costs
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 11
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
Source: The ALMR Christie & Co Benchmarking Survey
Operating Costs
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 12
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
Source: The ALMR Christie & Co Benchmarking Survey
Costs by Market Segment
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 13
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
Source: The ALMR Christie & Co Benchmarking Survey
Costs by Market Segment
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 14
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
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 15
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
Costs by Market Segment
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 16
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
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 17
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
Source: The ALMR Christie & Co Benchmarking Survey
Costs by Agreement Type
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 18
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
Estates with Majority Tied Leases Estates with Majority Commercial Leases
Source: The ALMR Christie & Co Benchmarking Survey
Capital Expenditure
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 19
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
Source: The ALMR Christie & Co Benchmarking Survey
Capital Expenditure
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 20
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
Source: The ALMR Christie & Co Benchmarking Survey
Gross Profit Margin
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 21
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
Source: The ALMR Christie & Co Benchmarking Survey
Gross Profit Margin
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 22
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
Source: The ALMR Christie & Co Benchmarking Survey
Gross Profit Margin
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 23
Tied leases vs commercial leases
62%
68%71% 69%
40%
50%
60%
70%
80%
Wet Margin Food Margin
Estates with Majority Tied Leases Estates with Majority Commercial Leases
Source: The ALMR Christie & Co Benchmarking Survey
Messages to Government - Legislative Costs
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 24
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
Source: The ALMR Christie & Co Benchmarking Survey
Messages to Government - Premises Costs
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 25
Premises costs as a percentage of turnover
0%
5%
10%
15%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Source: The ALMR Christie & Co Benchmarking Survey
Confidence and Outlook
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 26
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
Source: The ALMR Christie & Co Benchmarking Survey
Confidence and Outlook
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 27
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
Source: The ALMR Christie & Co Benchmarking Survey
Confidence and Outlook
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 28
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
Source: The ALMR Christie & Co Benchmarking Survey
Confidence and Outlook
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 29
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
Source: The ALMR Christie & Co Benchmarking Survey
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
Benchmarking Success - Highlights of the ALMR Christie & Co Benchmarking Report 2017 30
Contact
Christie & Co
Neil Morgan – Managing Director – Pubs & Restaurants
Ted Darley – Director – Hospitality
Ramzi Qattan – Associate Director – Consultancy
The ALMR
Kate Nicholls – Chief Executive
David Sheen – Policy and Research Director
Lina Olea – Membership Marketing Manager