Obvious statement incoming 🚨 Pubs and bars play a huge and vibrant part of UK and Irish culture.
Think of a quaint, cosy pub in a small village. You can picture it so clearly, right? The smell of freshly poured beer and classic pub food, the sound of a crackling wood burner, and the people ordering at the bar — it’s so ingrained in our way of life. In fact, the UK has the highest number of pubs in the world!
But pubs and bars are facing a tough time right now. England and Wales saw 239 pubs shut down in the first quarter of 2024. That’s an average of 80 closures every month. 🤯
So let’s take a look at what the challenges are, and how to overcome them with the right technology.
5 challenges facing pubs and bars right now
Before we get to the solutions, let’s lay out the issues that pubs and bars are facing at the moment.
1. Managing fluctuations in demand
This is a significant challenge for pubs and bars. It involves navigating varying levels of customer traffic due to things like seasonal changes, economic conditions, local events, and changing consumer preferences.
For instance, there’s often a surge of customers during holidays, weekends, or major sporting events. But weekdays or off-peak seasons? They might see a substantial drop.
To remain profitable, pubs and bars need to be on top of these fluctuations. This means optimising staffing, inventory management, and so on. But balancing these elements is hard, especially trying to keep on top of everything in real-time.
2. Improving waste management
Food waste is one of the biggest challenges for businesses in hospitality, including bars and pubs. In 2021, The Waste and Resources Action Programme (WRAP) estimates that 10.7 million tonnes of food was wasted in the UK, with the hospitality and food service industry responsible for 10% of it.
When food goes to waste, it means that profits take a hit. Think about your ingredients — you’ve paid for them, and you’re throwing them away before you can recoup your costs and make a profit.
But efficient waste management is crucial for pubs and bars. Not only can it significantly reduce costs, but it’s also better for the environment.
3. Controlling labour costs
The minimum wage has increased this year, making labour costs higher than ever before. With other costs piling up and rising across the board, it’s becoming harder and harder for pubs and bars to pay staff wages and still make a healthy profit.
The key is matching staffing levels to demand, which isn’t always easy — unless you have the right technology in place, of course. More on this later!
4. Staying on top of market trends
Pubs and bars must continually adapt to changing tastes, preferences, and other market trends to remain profitable. Failing to do so means that customers may choose other venues over you.
Think about the growing number of people choosing not to drink alcohol. For pubs and bars, this can impact footfall, revenue, and profits. As a result, they need to make changes to their offerings to appeal to these new customer preferences. For example, adding low or no-alcohol beers and cocktails to their menus.
But keeping up with these trends is a job in and of itself. On top of managing a business, it’s hard to find the time to stay on top of what’s happening in the industry and how to best serve customers.
5. Regulatory compliance
Regulatory compliance is a complex and ongoing challenge for pubs and bars. These include licensing requirements around the sale and consumption of alcohol, health and safety standards, employment laws, and regulations around smoking areas and noise levels.
Adhering to a range of laws and regulations is half the battle — keeping up with these regulations is the other half. Plus changes in legislation, such as stricter age verification requirements or adjustments in operating hours, can cause huge adjustments in operations.
It’s a lot to contend with, and it’s hard to keep on top of it all when you’re also trying to run a profitable establishment.
Is technology the best solution to these hurdles? Yes, and here’s why
Technology is one of the best ways to overcome pretty much all of the challenges listed above. We know that’s a bold statement to make — but we really believe it.
Here’s why:
Accurately predict demand to manage fluctuations
With the right restaurant technology, you can accurately predict demand. This means you can:
- Plan ahead to adjust your labour schedules and inventory orders to meet predicted demand.
- React in real-time to fluctuations that are happening right in front of you.
Both of these features allow you to optimise your costs, reducing the risk of overspending to keep your profit margins healthy.
Take a look at Nory as an example. Our AI-powered system analyses historical data alongside external factors (like weather and local events) to predict demand. As a result, you can proactively react to these fluctuations to ensure profitability.
Nory success story 🥳 Find out how Masa accurately forecasts sales within a 3% margin, controlling its labour costs to within 1% of what they’d planned!
“Constantly being able to see what your sales are, what your cost of labour is — and trusting that is really valuable.” – Shane Gleeson, owner and founder at Masa
Streamline pub stock management to reduce waste
Restaurant technology gives you access to valuable inventory data. You can see what you have on the shelves, what’s in the supply chain, and what you need to order to meet demand.
With this visibility, you can optimise your inventory orders to ensure you have enough food and drink to meet demand, but without over-ordering and spending money on items that you’ll inevitably throw away.
Look at Griolladh as an example. The growing franchise uses Nory to manage its operations. As a result, they have real-time access to sales performance and inventory levels. They can effectively forecast sales, manage inventory costs, and reduce waste in real-time.
💥 Find out how Nory helped Griolladh expand its restaurant by 3x!💥
Hot tip 🔥 With a restaurant operating system like Nory, you don’t have to worry about manually updating your inventory orders. We analyse your current stock levels, and automatically place orders based on what you need to meet demand.
Optimise labour management to minimise costs
We know that restaurant technology can help you predict demand, so how does this feed into labour costs? Well, when you can accurately predict demand, you can optimise your labour schedules for the better.
Let’s look at an example.
If you know you have a busy Saturday night coming up, you can schedule enough staff to run a smooth operation. It’s a full rota of employees, but you know you have enough demand to warrant this many staff. Plus, it ensures you provide a seamless customer experience.
But if you have a quiet Wednesday evening coming up, you can adjust your staffing levels accordingly. This means you spend less on labour costs but still deliver on the customer experience (you’re not understsaffing to save money). As a result, you spend less money on unnecessary staff wages and pocket a higher gross profit.
Nory success story 🥳 Did you know that Roasting Plant Coffee cut its labour costs by 18% in just two months of working with Nory? With our real-time insights and accurate forecasting, the coffee shop franchise was able to optimise its labour scheduling across all locations.
Track the latest trends with real-time insights
Restaurant technology puts valuable data at your fingertips. You can see your popular menu items, your peak times, your costs, your profit margins — the list goes on.
All this information helps you spot trends in sales and customer behaviour, which means that you can make fast and informed decisions to boost your bottom line
Let’s use the growing trend of non-alcoholic drinks as an example.
By tracking bar sales, you might see that non-alcoholic options (like low-alcohol beers or mocktails) are growing in sales. Your alcohol sales on the other hand? They’re slowing down.
These insights tell you that there’s something larger at play. People are choosing non-alcoholic drinks, so you need to ride that wave. This means increasing the variety of low-alcohol beers, refining your mocktail menu, and offering promotions on no-alcohol beverages.
J.D. Wetherspoons is a good example of this. The figures show that people want low-alcohol beverages, and the well-known pub company listened. They’ve recently added more low-alcohol beers to their menu to appeal to this growing demographic.
Hot tip 🔥 Check out the restaurant websites and social channels we suggest you follow to stay up to date with the latest trends in the industry as a whole
Comply with health and safety regulations
Take a weight off your shoulders and use technology to handle some of your compliance requirements. Here are a few examples to consider:
- Automatically scan IDs for age verification. If you’re serving alcohol, use technology to verify IDs and minimise the risk of human error. Take a look at Yoti as an example.
- Use temperature monitoring software. Ensure you store all your food and drink within health and safety requirements by implementing software like Food Safe System. It helps you record and monitor your food storage unit temperatures, as well as store and complete HACCP and other kitchen checklists.
Smash the challenges facing pubs & bars and boost your profits with Nory
Yes, pubs and bars are facing challenges at the moment. Managing fluctuations in demand, reducing waste, and controlling costs are just a few examples.
But it doesn’t mean that you can’t thrive in this environment. There are ways to combat these challenges, putting yourself in a good position to increase your profit margins and grow your business.
The key solution? Technology.
FAQs about the challenges facing pubs and bars
What are the threats to a pub?
There are a few things that can threaten the success of a pub in the UK in the current climate. Rising costs, fluctuating demand, changing consumer preferences, and compliance regulations are a few examples.
Are pubs still struggling?
In all honesty, yes. The figures show that pubs are closing down at a higher rate than usual, but that doesn’t mean it can’t be turned around. With the right systems in place, pubs and bars can access the insights they need to make smart and informed decisions about their business. It means they can cut costs, increase profits, and stay afloat during this tough time.
What are the challenges of a bar?
Bars face many of the same challenges as pubs, including changes in customer demand and preferences, rising costs, and strict compliance regulations.
How can restaurant technology help bar and pub operations?
With restaurant technology like Nory, pubs and bars can access real-time performance data. This information provides valuable insight into the success of the business, as well as how to improve it. For example, pub and bar owners can predict demand, optimise inventory levels, improve scheduling, reduce food waste — the list goes on!
