Investing beyond the British pub

Thousands of British pubs have called last orders for the final time over the past few years – and the trend looks set to continue. Soaring costs, increasing taxation and changing social habits have made life a nightmare for hard-pressed landlords across the country. 

Only 40,000 pubs are currently open – compared to 75,000 in the 1970s – and the Institute of Licensing warns they’re disappearing at a rate of one a day*. Emma McClarkin, CEO of the British Beer and Pub Association, said the rising costs had made it virtually impossible to make a profit. “Pubs are trading well but most of the money that goes into the till goes straight back out in bills and taxes,” she said.

Investment opportunities

So, what does this mean for investors? Where are the opportunities to make money now that trips to the pub have become less popular?

Well, the good news is there are plenty of sectors that have benefitted from public houses disappearing from many high streets. So, let’s take a look at some of these areas, the companies enjoying the subsequent revenue uplift and the investment funds embracing them.

Supermarkets 

Many people are opting to drink at home and that is giving a financial boost to supermarkets, off licences and online retailers. Britain’s two biggest supermarkets are Tesco and J Sainsbury, which have a 28.1% and 15.2% share, respectively, of the market**.

Shares in Tesco have risen almost 15% over the past year, while J Sainsbury is up by nearly 10% during the same period***. Both companies feature in the top 10 of the Schroder Income fund****, which invests in undervalued companies or those waiting for a correction. This is a UK equity income fund that seeks to balance dividend yield with dividend growth and balance sheet safety in its pursuit of a growing income.

Online retailers

Of course, there’s always the option to order your alcohol online. Amazon remains the go-to retailer for millions of people around the world. The site offers a dizzying array of wine, spirits, ciders, cocktails and beers, as well as various alcohol-free ranges that have grown in popularity over recent years.

Over the past year, shares in Amazon have risen by almost 25%, while the stock is trading 100% higher than it was three years ago^. The US giant is currently the sixth largest individual holding in the CT Global Extended Alpha fund****, which buys high return on capital businesses experiencing sustainable structural growth. As an added bonus, it has a 130/30 structure, which means lead manager Neil Robson can make money on stocks he expects to do well – as well as those likely to underperform.

Home improvements

If you can’t go to the pub – then why not bring the pub to you? 

Retailer Dunelm offers indoor and outdoor solutions to help create the atmosphere. These include garden bars as well as everything from silver ice buckets to cocktail shakers, wine racks and drinks dispensers.

Dunelm, whose shares are up roughly 11% this year, is one of the holdings in the AXA Framlington UK Mid Cap fund****. Lead manager Chris St John has an excellent track record at the helm of this portfolio and uses thematic long-term ideas to construct a portfolio of dynamic growth companies. 

Online entertainment

Of course, not visiting the local pub does free up time for other activities. A prime example is online gaming, with the worldwide market estimated to be worth more than $27 billion^^. 

Everplay group is a leading global indie games developer and publisher that was founded in 1990 and previously known as Team17 Group. It listed on the London Stock Exchange in 2018. It’s currently the second largest individual stock position in the Premier Miton Tellworth UK Smaller Companies fund****, which aims to provide long-term capital growth. The fund’s managers, Paul Marriage, John Warren and James Gerlis, believe that meeting company management is integral to the overall investment process.

We can’t overlook Microsoft in this section. The US giant has a substantial gaming division that includes the popular Xbox brand. Similar to Amazon, Microsoft’s stock price has risen almost 100% over the past three years^ and it’s currently the world’s second largest company, with a £2.77 trillion market capitalisation, only trailing the £3 trillion of Nvidia^^^.

It happens to be one of the most significant holdings in the Mid Wynd International Investment Trust****, which scours the globe for businesses with growth potential. The result is a high-conviction portfolio of 40 to 50 stocks that the managers look to back for the long term. It’s a strategy that’s proven to be very successful.

Pub alternatives

It’s fair to say that the declining number of pubs – especially those that serve food – means more potential customers for those still in business. Hospitality group Whitbread, whose brands include Brewers Fayre, Beefeater and Cookhouse + Pub, is a prime example. Its shares have risen almost 10% year to date^. You can get exposure to Whitbread through the Janus Henderson UK Responsible Income fund****, which aims to provide an income, with the potential for capital growth, over the long term.

*Source: Institute of Licensing, 18 July 2025

**Source: Morningstar, 24 June 2025

***Source: London Stock Exchange, at 23 July 2025

****Source: fund factsheet, 30 June 2025

^Source: MatchWatch, at 23 July 2025

^^Source: Uswtich, 6 August 2024

^^^Source: Largest Companies by Marketcap, at 23 July 2025