After last week’s report that beer sales are not quite as shit as they have been, there’s similar cautious optimism this week for pubs – while not exactly something to shout from the rooftops, there are two bits of news suggesting that things have at least stopped getting even worse.
First, The Publican reported yesterday on claims from Merrill Lynch that pub performance is improving. The city broker chained that pubs face a brighter outlook in 2010, “with trade recovering, debt at manageable levels, regulatory concerns back to historical levels and property values having bottomed out”.
They were looking mainly at the big PubCos of course, and claimed in that the tenanted sector in particular was improving, with the underlying performance trend improving and top-end pubs showing “greater resilience”.
Today, this was followed by new data compiled for the British Beer and Pub Association by CGA Strategy, showing that the rate of pub closures slowed in the second half of 2009. We’ve spent six months quoting the horrible figure of 52 pub closures a week – that has now slipped back to 39 a week. Hardly great news – before we got up to 52 this was shocking – but after 52, it doesn’t seem quite as bad, and suggests that some of the factors killing pubs have done their worst.
A total of 2365 pubs closed in 2009, with the loss of 24,000 jobs. There are now 52,500 pubs in Britain – well down on the 58,600 pubs operating when the Licensing Act came into force in 2005. In addition to the loss of these vital community hubs, the Government is set to lose over £250 million in tax revenues this year, if the current closure level continues.
Food for thought for PubCo haters – in the second half of 2009 the rate of closure of free houses was far higher than tenanted or leased pubs – from July to December 575 free houses closed compared to 320 tenanted and 117 managed pubs.
The data also shows that pubs serving food led pubs continued to do better than those that don’t – just 130 of the pubs that closed were food led, with 883 drink-led.
It convinces me that while the trade is absolutely right to point fingers are factors such as supermarket pricing and in particular Thunderbirds Boy and his moronic tax rises, the recession has clearly been a particular bane to pubs, and now it’s easing, so is the pub’s plight.
The industry is by no means out of the woods and could still do with a helping hand from government rather than yet more punishment, but the pub is not going to die. Many (though I’ll admit, not all) of those who behave in an entrepreneurial way and continue to offer people something relevant will survive, and many are prospering.
I’ll be talking about this on Five Live’s drive time show later today.