Pubs are closing at an alarming rate in the UK, with recent findings from the Insolvency Service revealing that UK pub closures in 2022 were at the highest level in a decade. More than 500 pubs folded last year as they struggled with the rising cost of living.
Simon Asplen-Taylor, CEO of data and analytics advisory company DataTick, said: “Closures are a last resort for pubs and it’s saddening to see their decline across the country in recent years. The closure of these businesses can have negative effects, including increased social isolation and the loss of local heritage.”
By taking a closer look at their data, pub owners can identify key areas of the business that may need more attention in order to avoid closure.
Here are a few areas where pub owners can start utilising data effectively.
“We worked with a hotel chain to identify its Key Performance Indicators (KPIs) and how they could use data to create them and how the indicators would enable them to take actions.”
The following was investigated:
- The average occupancy rate.
- The average duration of stay
- Where they were travelling from (country / town)
- The reasons why people were staying
- The number of cancelled reservations and reasons why
- The average revenue per booking including optional extras
We started in one geographical area that generated some value and then rolled it out with some minor changes to the next one.
This data enabled the chain to identify where to advertise and what to put in the advertisements. As a result, they were able to increase occupancy by 3%.
As a result of tracking the spend on extras they were able to try new services, eliminate non profitable services and increase revenues by 7%.
Analyse sales data
Pub owners can analyse their sales data to identify trends and patterns in customer behaviour. For example, they can track which items on their menu are selling well and which ones are less favoured, to adjust their offerings accordingly. They can also use the data to identify peak times for business, so that staffing levels can be adjusted.
Having a reliable system in place for collecting sales data is a must for pub owners. This could include using a point-of-sale (POS) system, spreadsheet software, or other tools, to track sales and revenue. Once the data is collected and organised, pub owners should use it to identify trends and patterns in customer behaviour.
Pub owners should monitor their expenses closely to ensure that they are not unnecessarily overspending in any area. They can track expenses such as food costs, labour costs, and rent, and adjust spending accordingly.
Creating a budget that outlines their expected income and expenses for a given period, such as a month or a quarter, is beneficial for measuring financial performance. After assessing budgets, they may be able to negotiate lower rent payments or find cheaper suppliers for their food and drink inventory.
By tracking expenses and income, pub owners can quickly determine the business’s profitability without having to dig through records. Many businesses make the mistake of making educated guesses about profitability because they aren’t tracking their expenses. They see the sales coming in, but then wrongly assume that their business is more profitable than it actually is.
Engage with customers
Pub owners can use customer data to engage with their customers and build loyalty. For example, they can send out emails or texts to customers to promote specials or events, or offer loyalty rewards for repeat business. Marketing efforts can then be made more effective; targeted promotions can be sent to customers based on their purchase history or demographics. This can encourage returning customers to generate a steady income that doesn’t fluctuate month on month.
Pub owners should monitor customer satisfaction regularly by collecting feedback through surveys or in-person conversations. By analysing this feedback, they can identify areas where they need to improve and make changes to ensure that customers remain content.
Pub owners can use inventory data to ensure they always have the right products in stock. By keeping close track of inventory levels, they can avoid running out of popular items or having excess inventory that goes to waste and therefore loses the business money.
Pub owners should conduct regular inventory audits to ensure their stock levels are accurate. These audits should include physical counts of inventory and comparisons with inventory records to identify any discrepancies. Properly training staff on inventory management procedures is essential for preventing waste and ensuring accuracy. Pub owners should ensure that their staff understand inventory management procedures and follow them consistently.
Simon added: “Some of these activities are already being carried out by landlords but it’s critical to undertake all of them and consistently. Naturally, the pubs that do these things are the ones that are managing to stay ahead and remain profitable. Using data can give them the extra edge to ensure they stay in business.”