Four pubs closing per day, figures show
5 March, 2008
BBPA reveals severe decline - and urges beer tax freeze in Budget
Many villages across Britain are facing a future without pubs, after new figures revealed closures have reached a rate of 27 a week – nearly four every day.
The British Beer & Pub Association (BBPA) today published figures showing the current closure rate of pubs is seven times faster than in 2006 and 14 times faster than in 2005.
Ahead of next week’s Budget, the group said it was “no time to place further regulatory or tax pressures” on pubs and called for a tax freeze.
Rob Hayward, chief executive of the BBPA, said: “Britain’s pubs are grappling with spiralling costs, sinking sales, fragile consumer confidence and the impact of the smoking ban.
“These figures show the stark reality of the pub trade today, in contrast to the hype surrounding the myth of '24-hour drinking' and extended pub opening hours.
“Pub closures at this rate are threatening an important hub of our social fabric and community history. What we need to stop the decline is support from Government and the general public."
During 2007, 1,409 pubs closed and pub numbers were down 216 in 2006 - four a week, following a fall of 102 in 2005 – equating to two a week.
Urban pubs have been hardest hit, with two per cent of all urban pubs closing in the last six months, the BBPA said. Pubs without the room to provide an attractive outside area for smokers, and those that are not heavily focused on food sales, have faced particular difficulties, it added.
The figures echo those released by the Campaign for Real Ale last year which showed 56 pubs a month are closed permanently, 80 per cent of which are urban.
The BBPA said beer sales in pubs are now at their lowest level since the Great Depression of the 1930s and pubs are selling 14 million fewer pints a day than they did when sales were at their peak in 1979. In addition, rising costs in brewing, food and energy, have hit the trade hard.
Total alcohol sales in pubs have fallen by around six per cent in the last 12 months, while there has been a surge in food sales, profit margins are being squeezed because of the additional costs associated with selling food.
“Some commentators would have us believe that the pub trade has faced a bonanza following the introduction of the Licensing Act in 2005,” said Mr Hayward. “Nothing could be further from the truth.
“The industry is facing very difficult trading conditions, which is resulting in the closure of hundred of pubs across the country.
“This is no time to place further regulatory or tax pressures on a great national and community asset.
“A vital part of the British economy and social life is under the most severe strain it has faced for decades. Increasing these pressure and costs will only result in the loss of more of Britain’s much-loved community pubs.”
Readers' comments
I notice dave & warren have quietened down, I wonder if we have struck a cord. Nobody seems to be sharing any solutions to our problems,or isn't there any?
Sam, couldn't have put it better myself. The worst thing for pubs, even worse than the nazi no smoking law are the pubco's. They have and are still decimating the industry with their greed and ruthlessness. When will people learn and listen, they do not care about you they only care about your rent and beer being paid for, if this stops you are out ! Take me to any town and I will show you the Pubco pubs, they will be underfunded and in a bad state of repair to some degree. Managed houses and Freehouses are the only way forward. Anyone out there looking to get in the trade DO NOT GET A TENANCY WITH A PUBCO . I once told our BDM all the problems we had and how we could make money ? no answer. It does not matter what they say if you cannot buy your produce (Beer) at wholesale prices you can not compete, simple as that !
Warren, my dear boy, the last eighteen years have been strewn with the failures of people who have gone into the business with attitudes like yours. What to do when that ever so friendly BDM's replies to your intelligent questions at interview turn out to be lies and they have your money ?. What about the answer to the question "how is my inventory valued when I pay for it, and how is it valued when I sell ?. Does the brewer / pubco take a cut ? you bet they do but they won't tell you and you won't be considered the right tenant for asking. Enhanced levels of support - rubbish. This means that they will get all your trading information before you do and if you outperform they will oust you one way or another. I could go on but it simply stresses me. We have run a very successful hotel, restaurant,freehouse as well as a leasehold (with Whitbread) and three tenancies over nearly thirty years. We have immense experience and much energy and enthusiasm for the business, but we only consider freehold now . A manager once asked my advice on taking his pub as a tenant, I explained precisely what the realities were but he insisted that "there must be some angle" He took it anyway and lasted fourteen months !. I just hope he saved something from the wreckage. Get professional advice from an INDEPENDENT business advisor i.e someone who does not rely on the pubco's or brewers for their business. Those will always put their future business over your interests . Would your bank lend to purchase -ask them. Above all do not allow your inate enthusiasm and confidence to rule your head. Sam
warren lol are you on drugs i dont winge and have probably put more in My business than you would ever think about get yourself a lease then work at it and comeback in four years after biulding it up to have someone with bully boy tactics try and force it off you, working for a holding company is easy its not your money your playing with if it was then you wouldnt say what you said without looking at the facts oh it 1 o clock im cleaning lines bet you have someone do them for you
We don't want sympathy we need help and now, yes hopefully we did read the small print,it didn't say that the goverment would impose a minimum wage increase every year,or that 1/2 our customers would be alienated for smoking and driven away,the sales go down the costs go up and we can't keep increasing the cost of the beer to cover these increase's.Customers have only got so much money in there leisure pound which is being increasingly eroded with ridiculess utility bills,interest rate hikes etc,etc.And the lure of cheap supermarket drinks. I don't mean to whinge but I object to people assuming I don't put the hours in,if I'm upstairs before 2.30am I've been lucky,when I do overtime I don't get money in my pocket just a bit closer to paying a bill.Reading the majority of comments and speaking to other licensee's there's a lot of problems out there.
I agree with you warren,also the moaners out there re pubco's etc know what they are getting into when they sign a lease unless they are not reading their agreements and in that case I have no sympathy !
So Warren thinks pubs make money - no businesses in this country make any money. What with greedy landlords, profit margins, utilities, insurance, bank charges, fuel charges, local authority charges etc. etc etc and finally ridiculous politicians how can any decent business make money? What did Warren say he did before?
I am at a loss as to what to do next, the pubco's still think that we can take umpteen thousand per week, so do the council, the police, the government, the taxman, the vat man, it is so childish for these people to refuse to accept that they could reduce our overheads to keep us in business for longer, after all, most of us have got used to working for nothing and juggling money from one ponsey lot of freeloaders to another. so we just live to keep a roof over our heads now, surely they could help us to do this? NO
Warren I here your arguement and ur enthusiam is to be applauded,and I agree there are too many people in pubs with no experience. but until you have a pub of your own and tied to buying off your landlord, pay over inflated rents, staff +NI +Tax, Vat returns, and all the other costs involved with a premises which you wont see until ur that position you will never appreciate what people go through, then a down turn in trade. it hurts hard and it is you that doesnt get paid. Working for a company who has buying power, centralised costs etc etc are a differant ball game, you get paid regardless.
Well that isnt a surprise now is it. by October that rate will increase with Minimum wage uplift. How many more hours a day can we do to save money?? when ur that knackard ur no use to anyone! and by then ill be working for about 90p an hour. government are more than happy to let this carry on as more and more housing is needed, so the concerted efforts to screw us are kept apace, because us law abiding folk are easy targets for them. we all need to stand upto them, no sorry that would be our Landlords, but as we have seen over the smoking ban, none of them have any bollocks and are only concerned about there share prices there and then. The job of a publican within 10 years will be extinct. Great Britain isnt so Great anymore. time to bail out to somewhere warmer!
I don't want to say I told you so ,but I've been saying this for at least six months,I used to have three pubs,now down to two,the pub I handed back at a loss,we couldn't sustain the level of sales required to cover the overheads,needless to say the pub company were of no help at all,I had to shut the pub to get them to move,after it was obvious I wasn't going to get any of my fixture & fittings money back or my bond,I decided to cut my losses,we did have a good customer base and excellent restaurant reputation but the overheads were killing us £1000 a week rent on a 4 barrel a week pub? these wern't the figures I was given to start with.The pub has had two management companies since i was there,it's now shut again it's about time they rethought their sums I'd have thought,but that's just cynical me. This is only the tip of the iceberg . Unfortunately the numbers must be an average across the country because locally to me the no' of closed/semi cosed pubs seems to be a lot higher (semi closed =pubs being paid to stay open with the hope of getting some m-- to waste their savings) on a very on a volatile trade with little security,I wouln't recommend it to any one at the moment,I still have two and am struggling like hell,lookily I have recieved some help now (different pub company),after telling them I was close to closing their pub.The pub companies are not exactly forth coming in offering the help that is needed at this and the forseeable future,eventually as the share prices drop even further they might rethink their position I just hope it's not too late for the majority of licensee's.The pub companies rely on stability which this trade hasn't got any more,with constant rising business costs,as I write it has just been announced that the minimum wage is going up again?? How are we to keep passing these increase's on to our customer's (friends) I've become a fiend with the prices I have to charge,minimum wage I wish,I havn't recieved the minimum wage for two years.if I worked a 30 hr week I might come close but we all know in the pub trade it's more like 80 hrs.Well I've had my gripe,hope all you prospective licensee's heed the warning,and all the pub companies sort the trade out before it's too late.
I still cant believe that everyone is blaming everyone in the industry, albeit the excuses of the smoking ban, more taxes on beer, costs less at supermarkets etc., regarding pub closures. Unfortunately i have not been in that great position of running my own place , although i have over 17 years experience. Unfortunately i ended up wqorking for holding companies looking for a fast buck. although the time i had with a pub i did very well. So my message to all the publicans and all the whingers in the industry. is get off your backside and do something about it. Harsh you may think,. But no. There is still money to be made in this industry if you stop blaming everyone else and looking for a scapecoat.you will be sucessful. The problem also is that everyone goes into a pub and thinks its easy, they buy it, and then the reality sets in, that its damn hard work. So heres a message to all the other publicans and workers in the pub industry keep up the good work.