ROSIE DAVENPORT gives an overview of the key findings from our surveys over the past three weeks: the year ahead looks good for freehouses, most having seen turnover rise in the last year; in the managed sector, consolidation has continued, and food is seen as a key growth area; but in the tenancy & leasehold sector, a starker picture is painted
Freetrade
There are positive signs of an upturn in mood among freetraders this year, with pub investment and future security working hand in hand to give the impression that there's a good year ahead.
Although the burden of red tape weighs heavy on independents, 40% of whom see it as the biggest problem they face, a significant proportion of those pubs polled are seeking out opportunities, with food, B&B accommodation and real ale top of the list for development.
Only 15% of freetraders believe they don't have a secure future at their pub, which goes some way to explaining why the vast majority 75% made some investment in their pub this year.
The average investment comes in at £26,400 for the last year, but there are big variations between pub types and how long the owners have been in place.
Newcomers' optimism shines out
Licensees who have been in the pub for two years or less are the most likely to be putting funds into the business. The optimism exhibited by these newcomers is evident throughout the survey, as they consistently outline their hopes of swelling every element of the business from wine to beer sales. In reality, their goals might not be realised, but it's encouraging that few licensees who we asked say they regret going into the pub trade.
The majority of freehouses (61%) say their turnover has increased in the last 12 months, although 13% say the opposite.
While the average beer sales rose across country and town-centre freehouses, there was a decline in community pubs. In those outlets, there is nonetheless an expectation that barrelage will increase over the next year to 371 10 short of the 2004 figure, and still slightly ahead of the projected average across the freetrade sector of 366 barrels. As the beer market continues to shrink, clearly all pubs need to look for ways to stem the decline, although it's community pubs that seem to be struggling the most in this respect.
Country pubs are still the most likely places to serve food, though whether this will change with the smoking ban remains to be seen. One clear trend among our sample is that freehouses seem to be relying less on food, with 66% of pubs saying they serve food down 14% since last year. At the same time, more pubs 32%, up from 23% in 2004 are now taking Sky, a possible indicator that other sources of income are coming into play.
Staff recruitment and retention
Employment seems to be a big issue for freehouses and 22% of those that do have staff say they find it difficult to retain them, compared to 17% in 2004. A worrying 55% also say they find it hard to recruit although this figure has improved from 64% in 2004 with country pubs having the hardest job. This might explain why a third of licensees, especially those who run pubs with turnovers of less than £200,000, do not employ any full-time staff at all but rely on themselves and their partner to carry out the work.
Looking to the future, another shake-up to the retail mix is the new licensing regime, with just over half of all freehouses planning to take advantage of extra hours. As more freetraders have embraced the potential opportunity of extending their hours, they have become less concerned about local authorities taking over the role of licensing.