Nick Goodway: Tough times behind the bar as cheaper meals put the bite on pubs

We all know that we are living through a period of zero inflation, but even I was surprised to see that the average cost of a three-course meal in a pub fell by 45p (or 2.3%) to £18.74 between last summer and this.

According to Horizon’s Menu Trends, the price of a meal at Frankie & Benny’s was £20.89 this summer, compared with £24.15 a year earlier, while a meal at Pizza Hut cost £16.24, against £18.41 last year.

Prices at pub chain Wetherspoons also fell, with an average meal costing £13.62 this summer, compared with £14.20 last year.

Those are falls of 13.5%, 11.8% and 4.1% respectively.

The price of a so-called “quick-service”, two-course meal fell by £1.30 to £8.55 — a decrease of 13.2%.

These are not insignificant declines and relate to far more than just a short period of food and ingredients deflation.

They highlight just how tough it is out there for pubs and restaurant groups to get people to spend their hard-earned cash.

Indeed, as Horizon notes, there has been a 45% rise in the number of sides or extras being offered on pubs’ and other outlets’ menus.

Anything from onion rings to garlic bread typically cost 75p to £1.50 and are a way in which caterers can get people to spend more without raising the perceived price of the main elements of a meal.

The only sector that managed to raise prices — and then only by 89p to an average of £27.09 for three courses — was restaurants.

These figures exclude the kinds of two-for-one, lunch club or curry-and-a-pint deals rife throughout the pub and restaurant trade.

Such deflation is not good news for a sector that has already seen margins on drinks under pressure, higher utility and rates bills and much of which has already committed to paying the National Living Wage, which will push costs up even further.

As one senior pubco executive told me this week: “It’s a real battle out there. There’s only so much you can cut off portion sizes before people complain and you certainly can’t cut corners on quality.