Last orders for more pubs as costs soar
Britain’s pubs are being wiped out in numbers not seen for a generation amid soaring energy prices and the inflated cost of sourcing food and drink. This is prompting warnings from accountants that scrutiny of the bottom line may only go so far.
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It's a generational thing and I blame the youngsters. When I was younger I was always in the local boozer (or possibly champagne/wine bar), especially at lunchtime at work (along with everyone else). You almost never see that now.
Youngsters today are more interested in other stuff, like socialising online etc.
Or worse. See: https://www.bbc.co.uk/news/uk-england-hereford-worcester-64648815
https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czms/...
Not sure how accurate the above is, but where I live you pay £5/pint at the local. That's ridiculous money. Do we think wages are following the trend of increased costs? I would wager not.
I do agree that the culture has shifted though, just based on listening to how my parents speak about their youth.
Call me bonkers, but my friends and I were looking into this, I invented a Stella ratio, cost per 500ml can in the shops to cost of a pint of Stella in a pub.
We estimated in 1990 a can was £1 and a pint of stella in the pub was £2. a ratio of 1:2
Now its £1.25 a can and 5.50 in the pub, a ratio of 1: 4.4
I know a pint is 568 ml
Inflation would mean £1 would be £2.90 now so both are cheaper than they were, but the supermarket price is now ridiculously low!
The reason you never see it now is because you'll damage your career if you're seen to be drinking during the working day. Hardly the fault of the youngsters that management have killed that part of the culture dead.
The key issue isn't rising costs ... which are extremely painful (as in most other businesses that require both physical premises and staff) but are as nothing when considered alongside falling demand/revenues.
I don't dispute many of the suggestions for 'tightening the purse strings' (we've all been there at some point in the past), but unless there's a plan (call it marketing or diversification or whatever floats your boat) to prop up revenues (the bare minimum required) and then slowly increase them ... running a pub is just an exercise in experiencing the decline of the Dodo, but as a business.
How much of the problem is generational (as per Justin's point), and how much is sociological (e.g. the decreasing quantity quantity of people who stop off at the pub on the way home from work) ... who knows (not me anyway)?
But if you were choosing to invest in a leisure activity, it's not an area that I'd have chosen even before the 'energy crisis' or indeed the pandemic.
Yes. Look at popular TV programmes from the 1970s & 1980s (The Sweeney, Minder, Only Fools & Horses, Coronation Street, etc.) and a lot of their (working) lives revolve around the local boozer, reflecting how things actually were back then. That's not the case any more, that's for sure. The scene from The Office with an awkward lunchtime work drink is a more accurate refection of how things are now.
Me Too!
I can get a pint of real ale for £3.20 in my local still - that may change soon.
Too many pubs are still run (if that's the right word) by incompetent hopefuls fresh from a redundancy payout.
They used to be ex miners or coppers retiring early.
The survivors will be family owned free of tie (and rent) businesses
Shock horror if my beer goes up to £3.30!
VAT cuts do not translate into lower prices for the consumer, so I do wish trade associations and politicians would stop talking about VAT cuts as one answer to the wider issue of reviving the hospitality sector...and whilst the eat out to help out reduced rate allowed the sector to pocket a bit more profit, right now, with a cost of living "crisis", consumers are price sensitive as their pockets are squeezed and a VAT cut will neither help the hospitality sector nor the consumer (unless hospitality lowers its prices).
The sector hasn't recovered from the double whammy of Brexit and lockdown. Many staff left the UK pre-Brexit, those that stayed were either lucky to receive furlough, else many were dumped or stuck with zero hour contracts, some may have moved into other industries that are more reliable in terms of hours/income, there is no doubt the hospitality sector is suffering a recruitment crisis.
Having monthly/regular cashflows and management accounts makes sense, as does looking to diversify into home delivery or other fresh ideas. But as Justin has already commented, there is a shift away from the traditional pub and the chain pubs are not the "destination" they used to be other than at weekends and I'm not convinced that getting a good accountant will in itself be a solution.
I didnt read it as the VAT cut was to pass on to the consumer. Rather it was to help the business survive.
All hospitality clients i have would say VAT is their number one concern followed by gas and electricity
At some point government is going to have to acknowledge that its policies on zero carbon and business regulation and compliance are driving costs to such an extent that many of our traditional businesses and industries are no longer viable. Pubs and the whole entertainment sector certainly strugged from zero-covid and the fall out is only now becoming visible, but the longer term issues are still there and becoming more important. And the fact is there is no democratic element to any of this stuff. Government imposes under cover of "experts". It might have lost the cover of EU, which should be a good thing, although Whitehall is making sure it isn't. The point being that there is no single political party offering anything different, and you can't put a cigarette paper between the policies of left and right! Our way of life is under threat from the rise of the managerialists!
I do wonder when part of the headline is never discussed in the piece.
Those in professional life are always behind the curve examining accounts well after each year-end & the crocodile tears of liquidators hardly add much to the scenario.
I’m sure I’m going to frequent an establishment that cuts its staff to the bone whilst I wait for extended times for drinks or food to be served - not.
Five decades working out in the real world proved more worthwhile than those more used to the protected professional cloisters of the purple ballpoint!
Here is one for you, there is a agreement between owners of pubs (brewery) and tenants (landlords) called the beer tie, this means all beer has to be purchased from their owners of the pubs (normally brewery's), the beer tie is very expensive.
There is alleged talk around here of land lords sneaking to cash and carry on the quiet and sneaking in the odd barrel or so into the cellar.
Well the beer tie is one part that is killing the trade and whilst there was an agency setup to patrol this (Pubs Code Adjudicator) as we are finding out with Ofwat and Ofgen, these watchdogs are far too cosy to the suppliers and not the customers.
The whole beer tie was meant to be reformed, but like everything else in this Country, nothing seems to have happened at any level for the last 8 years, it often feels like since the Brexit referendum, government has just shut down every function and purpose and solely concentrated on Brexit (and HS2) and nothing else.
Good point Jason, the beer tie was meant to be banished.
I think it got watered down (no pun) allowing landlords to purchase all other drinks from wherever but beer must come from the brewery.
Two pubs on our books.
One closing this month as the electricity price goes from £13k a year to £50k a year. They made a £30k loss this year, unfortunately they took took the pub on in Feb 19 and after an encouraging first 9 months it just died with COVID and the Government sending mixed messages on whether it's safe to eat out etc etc. This one is an independent so can choose where to buy the drink from but overall they've had enough, BBL outstanding and a little HMRC so presumably a liquidator needs to come in etc. They already closed a couple of days a week to see if that helped but it hasn't. Really well run pub, really sensible directors who have done everything they can, can't help but feel sad.
The other pub has got rid of half its staff and it's run on a real skeleton basis only food on a few prescribed nights, has to but alcohol from the brewery that owns the pub and it is pricey!! Pretty sure they have been fined by the brewery for sneakily buying some items from Booker, I imagine that pub will also close.
Whilst drinking has had a huge shift culturally I think it's the pricing that keeps people away, I was out on NYE in the local town, all night in a bar with meal, music, drink etc...the town itself was absolutely dead, people just can't afford to go out like before, it is sad but just the way it is and it won't change.
Sad to see so many former nice pubs like this going unsold even at knock-down auction prices: https://www.cliveemson.co.uk/properties/239/86/
Having been both a pub user and acting for some pubs and restaurants over the years, it's been inevitable that pubs will slowly die away.
They used to be places to meet- no requirement for that any more when you can contact everyone anytime. Nip in for a pint on the way home and see your mates (or find a tradesman, etc).
It used to be the social thing- now the younger generation 'meet' online (or sit at a table staring at their phones).
Pub ties mean they pay more for supplies than a supermarket- it's actually cheaper a lot of the time to buy from a supermarket retail price than it is a brewery!
Staffing is an issue (if you can get any- younger people turn their noses up at this sort of job with their degree in social studies whilst being unemployed). The huge rises in minimum wage means wages are now a real issue for these types of businesses.
If the pub is rented, the rentals are usually massive.
If the pub has to pay rates, that's another huge cost.
Then you have heat (badly insulated buildings as quite old), light and power/gas etc for the kitchen, and finally don't forget employers NIC and pension contributions.
Add in societal changes (such as those that don't drink) and it's plain to see anyone who wants to take on a pub these days must be barking!
And the funniest comment of all is when the 'community' moans about losing their local- which they haven't supported for years or stepped foot in...
Don’t blame the difficulty in travelling into cities on train strikes. It has been impossible to travel into either Leeds or Manchester for months now because even if you can manage to get there there is no guarantee of a train back. The TransPennine service has collapsed with half the advertised services routinely cancelled on most days. The problems have been created by an incompetent train operator who rely on drivers working rest days and voluntary overtime to deliver the timetable and compounded by the DfT who seem to want to do everything in thief power to aggravate the position.
I'm not so sure that a ''decent accountant'' behind a potentially ailing pub is the best advice - any more than a successful landlord should provide sound tax advice. If Wetherspoons has confirmed 2023 closure risks amid a slow recovery from trading since the pandemic, there seems little chance of any change to the general fallout.
Pubs , like many businesses will continue to fail regardless during the current cost of living crisis. This said, many areas may prosper dependent upon area - and social impact.
Balloonings costs and changing drinking habits are obvious contributory factors to these closures. But it doesn't help that certain { most ? } pubs fail to comply with the 2003 Licensing Act , leaving the customer unaware of what the round is going to cost in the absence of any price list on display. It doesn't take Brains to see that the regular hikes of 10p and 20p on a pint are going to lead to another Doom Bar.
I didn't say it would necessarily solve everything - but clearly it will give the business owner a better chance than having an Accountant who they hear from once per year, with basic/unhelpful financial information.
Coming from a place of seeing the harm that a poor accountant can have on F&B businesses
lovely blame game, its a factor but not a cause....
a quick google shows 50,300 pubs in 2016 and 48,350 the year after, that's net so doesn't include new ones to top it up, what happened in 2016/7?
I suspect its culture and generation, the city I grew up in had a large number of universities, every Monday, Thursday, Fri, Sat it was packed with nightlife, even a Sunday was busier than a Saturday is now....
Now, its a ghost town, more small social pubs with food, smaller groups, I could name 50 bars that have gone bust, maybe 100 if I thought about it some, even Yates left town.... the universities though, more people than ever.
Hotels should do away with single supplements. I have looked at loads of coach holidays which suddenly become in excess of £100 more expensive or even unavailable for single people. They need all the custom they can get.
Whilst I (as a widower) understand your perspective ... from a purely business angle the majority of overheads are unchanged by whether occupancy is 1 or 2.
So maybe we're expected to be grateful that the single rate isn't the same as the total cost for a couple?