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The UK pub industry: anyone fancy a drink after work?

The UK’s declining pub trade has seen large numbers of businesses either facing corporate insolvency or personal bankruptcy in a short timeframe.

This phenomenon has been caused by numerous factors, such as the seasonality for coastal pubs which adversely affects them in out of season months, the rising cost of beer which has traditionally been seen as an easy tax revenue generator by successive governments, and the massive rise of stay at home drinking fuelled by cheap supermarket drinks which are often discounted to become ‘loss leaders’ just to get customers through the door.

And apart from slight variations in this trend, the issue is still a pressing one and more than 2000 licensed town centre premises ceased to trade in the past five years, a six per cent decrease across the country according to a report by Local Data Company.

In some respects, this decline has paved the way for the flourishing success of other hospitality businesses such as coffee bars, juice bars and tea rooms, but the pub is still in the UK’s top ten leisure businesses and some pubs succeed extremely well where others fail.

History can help us to see what has happened to the pub industry over the long term.

Pubs most probably owe their heritage to Roman taverns, followed by the advent of alehouses during the Anglo-Saxon times right up to modern bars and franchised premises city bars.

Crucially, until the late 20th century, pubs served a common purpose – as a social hub for each community when the cost of heating and lighting individual houses was greater than the cost of a drink or some food in a warm public house.

There were other good reasons for pubs to thrive. For example, in Victorian towns and cities pubs were safe places to quench your thirst because water supplies were mostly contaminated and waterborne diseases such as Cholera were fatal, killing 52,000 people in England and Wales in 1848. Relatively weak ale decontaminated the water it was made from and became the most common drink used by the masses.

Following the dissolution of the monasteries, pubs and taverns took over the role of primary hostelry for tired travellers. With the increased use of coaches as a means to move around the country, public houses became more valuable as businesses, and coaching inns became highly profitable enterprises, particularly if they became a stopping point for the mail coach.

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Pubs started to decline in the 1970s when supermarkets revolutionised the UKs shopping habits and offering wine and other alcohol suitable for home consumption.

The mechanisation of farms which reduced the numbers of labourers and the decimation of our mining and quarrying industries in the 1980s had a marked effect on the rural pub trade and many countryside inns were turned into accommodation as rising house prices drove a different market.

Low profits on alcohol, the need to provide food and accommodation to bring in trade were the most damaging changes to landlords, requiring staff and other overheads to take into account.

As we step into summer, we will undoubtedly see a peak time for the pub trade and this is currently being helped along by the craft beer revolution, which has seen micro-pubs and specialist ale houses surviving a bit better.

There is clearly a need for landlords to be more innovative in order to make a pub survive, changes such as extended working hours mean that people are more likely to socialise in the daytime or after work rather than evenings and so the daytime offer needs to cater for this. Historically, pubs would often close between three and seven pm, this would now be a peak time!

Pubs have a need, much like coffee bars, to cater for people doing business or using social media so wi-fi is playing a part in which location becomes the most popular.

It also offers a way to market the business as people ‘check into’ venues through social media and share their experiences, location etc with friends.

Larger chain pubs, although still highly popular for their cheap drinks offers, are not quite as prevalent as they were ten years ago and there is a shift from chain owned pubs back to small businesses, a positive development for the economy, helped by Government support for tenant landlords.

The demographic of pub-goers has also changed as people stay single for longer or postpone marriage until much later in life, meaning that pubs are seeing a younger generation of customer overall.

This is also reflected by the age of landlords, which has fallen dramatically as younger people step in to take on the role.

We hope the pub industry gets the long-term support that it needs, both from the Government and from customers, but the most difficult time for all of these fledgling ventures is likely to be in the early years as they fight to build up trade and reputation and balance cash flow.

These are large challenges in a competitive market and we can offer advice on how to counter the most common problems before they become so burdensome that they threaten the business.

Let’s all help the great British pub to survive and do our bit to support these historic businesses. Call us if your pub needs help – and in the meantime, we’ll look forward to a pint after work!

References and further reading

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