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Industry Trends

Changing British Pubs, The Good and The Bad

By January 26, 2016 No Comments
Changing British Pubs, The Good and The Bad

uk-pubs-changingOnce the stalwart of many communities, this time last year pubs were closing at an unprecedented rate – according to some figures at a rate of around 29 each week. According to this news report: in 1982 there were 70,000 pubs whilst there are now less than 50,000. A number that is set to decrease throughout 2016. This loss has cost the UK 24,000 jobs as well as integral part of British culture and tradition.

Cultural Changes

Cultural and social changes have both massively affected the popularity of the local pub. Our digital age has lowered the need to venture outdoors, with many people seeking companionship online there is far less incentive to leave your home. Not only that, but an increasing awareness of the risks of alcohol has seen overall consumption drop dramatically. According to the British Beer and Pub Association by around 18% with one in five adults no longer drinking. And competition is fierce from supermarkets who now offer a variety of alcoholic beverages at far more affordable prices, further reducing the incentive for potential pub goers.

The landscape of the hospitality industry also changed irrevocably in 2007 when legislation was introduced making it illegal to smoke indoors. An activity that, it could be argued, was at the core of any pub’s social scene. And whilst many countries allowed exemptions for the hospitality industry Britain introduced no such measure. According to the Institute of Economic Affairs “it is now widely acknowledged that the ban has damaged many pubs.”

This changing social landscape is further evident in the rise of coffee shops. Whilst pubs struggled during the recessions coffee shops displayed a phenomenal resilience that has seen their profits and numbers grow during the recession and beyond. Consumers seem to be attracted to the lure of the coffee shop, and demand for pubs, undoubtedly seems to be in decline.

Recession

The recession had a significant impact upon the popularity of pubs. And whilst the biggest spike in pub closures was in 2007, the year prior to recession, there seems little doubt that falling wages saw pubs empty and then vanish as owners could no longer pay rent. Owners were further hurt by the rise in alcohol duty in 2008 which saw the price of beer increase by 40%. This legislative measure meant that tax now accounts for over a third of the cost of a pint. And costs have been consistently rising for pub owners, as property prices have soared with the minimum wage set to increase in April 2016. A measure that has been attacked by Tim Martin, chairman of JD Wetherspoon who according to the Guardian stated it would, “affect pubs with far greater force than supermarkets.” There seems to be a general industry consensus that pubs can simply not keep up with the increasing price levels.

Of course, the numerous articles and debate over the concerning future of pubs has done little to help those owners struggling to keep their ship afloat, as metaphors focus on sinking and the general tone is one of profound pessimism. Whilst there is a genuine need for pub owners to adapt to the changing times the doom and gloom dominating the talk makes closing seem like the only option. For those pubs that are determined to survive, thrive and serve their local community they are having to change to keep up with the times. Boutique or bespoke pubs selling beers or ales not available in the supermarkets and those focusing on high quality food are slowly finding their footing amidst the changing economic and cultural landscape. And there are plenty of pubs that continue to flourish despite the mounting challenges, take a look at this celebration of British pubs.

Despite this doom and gloom, with pubs vying to remain that stalwart of communities, even as they continue to change and adapt, we’re optimistic about where the industry is heading with those pubs that are succeeding. That’s why we provide funding to UK pubs and SMEs, so that they can take advantage of growth opportunities and be well positioned to handle any uncertainties that may lie ahead.

Speak to a member of our business loans team on 0800 138 9080

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