Why have so many closed their doors in 2023?
The pub holds a special and central part in British life and is as important and integral to our culture as diners as to America and bistro’s are to France.
So why is the industry facing its biggest crisis in a decade as hundreds of pubs from village locals to city centre meeting places are deciding or being forced to close down?
According to the latest statistics released by the Insolvency Service, during the second quarter of 2023 (comprising the months of April to June) saw more pub closures during a three month period than ever before with 223 closing this year – that’s over 18 a week.
The broke the previous record, which was only set in Q1 this year when 200 pubs called time for the last time.
To put these figures in additional context, over the 12 month period from July 2022 to June 2023 some 729 pubs have closed for good – which is an increase of 80% from the 405 seen in the corresponding period from 2021 to 2022.
Total pub insolvencies (beverage serving activities)
|Number of insolvencies
There have already been more pub closures and insolvencies to the end of May this year than in the whole of 2021 and nearly 2020 too.
They are clearly on course to overtake the totals from 2019 and 2022 so 2023 will be the worst for pub insolvencies in the past five years.
Emma McClarkin, Chief Executive of the British Beer and Pub Association (BBPA) said: “Our pubs remain at the centre of a perfect storm pushing the people running them to make incredibly tough decisions.
“For the past few years, pressure has been building on our pubs, from the pandemic shutting down trade, straight into an energy bill crisis and eye-watering inflation and a cost-of-living crisis, staff shortages and supply chain issues, and finally last week’s rise in alcohol duty.
“For some these trading conditions have understandably become too much and they’ve made the incredibly tough decision to shut their doors, a loss to both our economy but also ending the vital role so many of our pubs play in their communities.
“It is essential that the Government rules out any further duty increases, permanently reduces the unfair tax burden on pubs and swiftly enacts Ofgem’s recent recommendations to ensure our sector can properly recover from almost three and a half years of debilitating economic conditions.
“Our pubs must be given the opportunity to not only survive at the heart of our communities but thrive there.”
The high labour costs, the unprecedented high energy costs, increases to food and drink ingredients and supplies, interest rates that have risen from 3.5% in January to 5.25% in August and an ongoing cost of living crisis that is driving down the income of customers.
Chris Horner, insolvency director with BusinessRescueExpert, said: “Pubs are struggling for a variety of reasons but the combined double blow of high inflation and interest rates is proving too much for many.
“Many pubs have large debt levels built up over the pandemic years including bounce back loans that they are struggling to service and interest rates could be the final straw for many of them.
“We’re hearing from several publicans and landlords that as rates have risen that banks have started to put pressure on them to make capital and interest repayments on loans which for some are just not viable.”
Any pub owner worried about their future should not look beyond getting some free guidance and advice.
They’ll work with one of our team of dedicated advisors who will let them know what options they have and how they can implement them efficiently and quickly in order to help their business during these unprecedented trading conditions.
The sooner you get in touch, the sooner you can implement options that will hopefully make things easier for you and allow you to concentrate on allowing your customers to forget their troubles for a while as you take care of yours.