Licensees optimistic about the future, says The Publican's Market Report

Licensees are in an optimistic mood, according to The Publican's Market Report 2006.

Despite what has been one of the most crucial years in the industry's history, with licensing reform and smoking plans among the major changes to hit pubs, it seems licensees have - in the main - been able to weather the storm and are now looking forward to a brighter future.

Our survey found that publicans are feeling pretty good about the financial climate in the sector generally and that trading in the difficult period over the last 12 months had actually been better than expected for the majority of them.

This year's report found that despite rising costs, 62 per cent had increased turnover in the last year and 51 per cent had increased their profits.

Another explanation for the upbeat mood could lie with the effect of licensing reform. The survey highlighted the fact that extended hours had not led to the increase in violence predicted by the national press, most notably the Daily Mail.

In fact almost nine out of 10 licensees believe that the new Act has helped quell disorder by discouraging pub-goers from lining up drinks at 11pm and instead leading them to drink the same amount over a longer period of time.

The Market Report also disproves media assumptions that all pubs would want to open round the clock, with only 31 per cent of the three-quarters that got extra hours using them.

James Laing, licensee at the Royal Oak in Bristol, said: "There have been a number of adjustments that we've had to make and will still have to make due to licensing reforms, but overall it's been good at pushing us forward. We're only adding an hour each night, so it's not making much difference, but it's helpful if we're holding functions and makes it easier to clear the bar at the end of the night."

Even on the issue of smoking, where some uncertainty remains, our report found that attitudes were more upbeat than last year.

While some pubs are likely to be hit hard by the ban next year, licensees are mostly feeling more positive about the impact of the ban than they were last year.

Those predicting a drop in trade fell from 27 per cent to 17 per cent, with the more extreme who foresaw "severe losses and closures" dropping from 68 per cent to 42 per cent. In fact 12 per cent of licensees now think they'll see an upturn in trade - four times that of last year.

There remains, however, industry-wide concern over the escalating costs. Forty per cent of struggling licensees blame rising costs for their problems, up from 32 per cent in 2005.

"Energy costs are our biggest worry for next year," said Danny Scott, licensee at Rick's Bar, Greenwich, South London.

"We're facing astronomical rises for gas and electricity. Costs for just about everything seem to be going up.

"The problem is it doesn't balance with what's going in the till, so we have to decide whether we're going to pass some of this onto the customers."

To order your copy of The Publican's Market Report 2006, please call 020 7955 3705 or email info@thepublican.com.