Pub insolvencies rise 13%
Between September 2018 and 2019, 530 licensed venues closed, which was up 13% on the previous year (470 insolvencies) and is the third consecutive year that pub insolvencies have risen.
The British Beer and Pub Association (BBPA) said that in the decade from 2007 to 2017, 9,150 pubs had closed leaving only 48,350 UK pubs in operation. This is almost 20 pubs closing their doors every week.
Other factors affecting pubs included rising staff and rent costs, increased duties on imported drinks and a struggle to absorb these costs to prevent them from being passed on to customers.
There are also more general demographic changes to be overcome with younger drinkers spending less time and money on alcohol and more on food and non-alcoholic drinks. Certain on trend drinks like decorative gin and craft beers have helped shore up the bottom line but the overall trend is a negative one.
Trade experts point to some pubs having success by adding more varied menus and food sales as well as non-alcoholic promotions to increase footfall during slower periods of the week but stressed the overall need for investment.
As consumer tastes change, so must the offering and there’s always an inherent cost involved.
Developing a food option or refurbishing an establishment requires capital investment and individual landlords, licensees or smaller pub groups are finding it increasingly difficult to obtain finance at reasonable rates due to Brexit anxiety amongst lenders and general tightening of conditions.
Chris Horner, Insolvency Director with Business Rescue Expert said: “It’s unfortunate to see any company fold but there’s something uniquely sad to see a traditional pub go out of business.
“Pubs have a unique status and place in British life and whether it’s a historic pub that’s been serving customers for decades or a newer craft ale or micropub, they’re more than a collection of fixtures, fittings and equipment – they’re memories and parts of people’s lives.
“Pub insolvencies and administrations are different to a regular businesses as there are additional legal matters to consider such as the alcohol licence.
“One example is if a pub goes into insolvency then the licence goes with it. A new prospective owner wouldn’t be able to just take over the running but would have to apply for a new licence from scratch.”
If you’re a landlord who’s spending more time pulling their hair out than pulling pints, or a licensee who can see a profitable gap in the market but doesn’t know how to reach it – get in touch with us.
After a free initial consultation with one of our team of expert advisers you’ll be able to see the next steps for your business as clearly as through a freshly polished glass!