'Survival of the community pub is remarkable'

12th May 2009, 11:16am

A new report, which analyses the pub industry and the effect of the economic downturn, has said that the way in which the community pub has survived is nothing short of 'remarkable'.

The Market Report Plus 'Public Houses' from research company Key Note said: "The public houses market was assailed by a tranche of negative trends in 2008, such as the slide of the economy towards recession and higher taxes on alcohol. This followed difficult years for the trade, including bans on smoking, new licensing laws and controversy over alcohol 'binge drinking'."

It highlighted how the number of UK pubs is contracting by around 2,000 a year, leaving some 55,000 in 2009, and total pub turnover has shrunk by 3.4% since 2006 to £15.7bn in 2008.

Given these problems, Key Note concludes that the survival of the small 'community pub' is remarkable, a testament to its role in community social life and its adaptation to new consumer demands e.g. for pub food, which now accounts for 25.5% of typical pub income.

The report also commented on the national pub companies such as JD Wetherspoon.

"There is never a shortage of budding publicans drawn from other walks of life. Typically, the new entrants sign up to a 'tied' arrangement with a pub company. This tie is once again being challenged at Westminster in 2009. Other headline news in early 2009 included the controversial offer of beers for 99p in pubs owned by JD Wetherspoon, one of the largest and most successful pubcos," said the report.

Adding: "Pubs such as Wetherspoons are having to fight back against the discounting of alcohol in supermarkets, although the pubs claim that they offer venues for responsible, controlled drinking." 

Consumer research conducted by NEMS Market Research in January 2009 for this Key Note Market Report Plus found that 87.5% of adults said drinks in supermarkets are 'much cheaper than the pub', while 62.5% said that drinks in pubs are 'much too expensive now'.

The Market Report Plus said the Wetherspoon group ranks as the fifth-largest pubco by turnover, with 715 large, company-managed pubs, although there are pubcos with larger estates of small pubs leased to individual publicans.

The largest of these are Punch Taverns (8,425 pubs) and Enterprise Inns (7,765). Measured by turnover, the largest company is Mitchells & Butlers (2,050 managed pubs generating £1.91bn a year).

"Although rooted in the history of the brewery-tied pub, M&B is now an independent developer of some of the most familiar and successful pub concepts such as Harvester, O'Neill's, Scream and Crown Carvery. Most M&B pubs, like most modern managed houses, are now food-led pubs (or pub-restaurants), with the pattern of income for the typical large pub having shifted inexorably away from pulling pints of beer.

"The pub will survive as a social venue (and as a restaurant), although companies need to adapt to new patterns of pub usage. For example, one major operator, Marston's, has an 'F Plan' strategy for dealing with 'food, females, families and forty/fifty-somethings' as future trends for its pubs," said the report.

Related Articles:

• 18 Nov 2009 - Enterprise Inns profits fall by 22% during “very testing year” for pubs
• 25 Aug 2009 - Punch blames poor trading on lack of sunshine
• 16 Jun 2009 - Punch Taverns remain 'very cautious'
• 10 Jun 2009 - Restaurant industry leaders give economic survival tips
• 28 May 2009 - 'Pubcos profit margin nine times more than Tesco'
• 13 May 2009 - JD Wetherspoon gets saucy with Levi Roots

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