As financial bad luck stories go, with about 29 pubs closing in the UK every week, it’s one of the most shocking.
If you were to plot the number of pubs in operating in the UK on a graph, you’d see a very clear, steady and sharp decline. From 99,000 pubs in 1905 to 75,000 in 1969 to only 48,000 in 2013.
The problems go deeper than just numbers though. Even as recently as the year 2000, there was still huge interest in meeting socially in pubs. The recession clearly didn’t help, but in 2015, and with the negative impact of taxes, additional rules and cultural shifts, all of these factors have hurt British pubs majorly.
Seemingly daily news stories of pubs closing with unpaid debts caused by unreliable supplies and looking at administration and debt restructuring are two-a-penny in this market.
Can anything be done about it or is it all about managing an inevitable decline?
Alcohol itself has had some dreadful PR in the past decade. That’s undoubtedly led to the number of pub goers dwindling. As a nation, we’re simply drinking less alcohol.
The Office for National Statistics (ONS) calculated that average alcohol consumption in the UK has fallen 15% over the last ten years.
It seems like the world is moving on, yet many people still love a good pub atmosphere and under the right conditions, pubs can still generate a good revenue.
Meanwhile, sensible drinkers also have supermarkets to buy their favourite tipples from and, increasingly, landlords can’t compete with their margins, nor with their expensive marketing campaigns.
The public are also increasingly moving towards wines, which has hit the traditional ale and beer market, giving landlords a torrid time up and down the country.
Other reasons that can lead to debt problems for pub owners are sub-optimal opening hours, greedy pub chains, rising rents, VAT increases, increased operating costs and even the smoking ban.
Many tenants, particularly those tied to large pub chains, claim that they earn less than the minimum wage – something that rings true in our experience.
A New Dawn?
In the past three years, the explosion of craft beers and micro breweries has started to, if not turn the tide, at least stem it and to offer a new dawn of quality-led products in pubs that heralds good news for publicans and pub-goers alike.
Despite this though, many pubs still encounter various debt issues which require solutions unique to their profession.
Debt Problems for Pub Owners – solved!
We’ve spent years advising pub managers and owners on dealing with debt problems.
This includes setting up repayment plans, restructuring their current business or closing down in a way that draws a line under their debts or allows them to offload unprofitable elements.
We’re fully aware of the various problems associated with leases, tenancies and tied agreements, and also stock valuations.
If you want to hear more about how we can help you get your pub rocking again – get in touch to arrange a free initial consultation.