Comment: Survival of the fittest

Take a look around the Broad Street/Brindley Place area in Birmingham these days and you will find a plethora of high street names all competing for the same share of an ever more selective consumer wallet.

There's everything from Walkabout to Pitcher & Piano, Bar Risa to Apres, Revolution, Lloyds No 1, All Bar One and Living Room, plus approximately another 40 to 50 establishments - and that doesn't include a mass of restaurants.

Despite the concentration of pubs and bars in such a confined space, they all seem to survive. So, will this trend continue or will we see a shake out which will leave a smaller number of operators?

The arguments for some shrinkage seem compelling. Utility costs have affected all sectors, and this one is no different. Costs have hit operators really hard following last year's licensing reform which cost the industry millions. Margins on food and wet sales have been squeezed tightly by many operators, driven by the demands of the City and shareholders to show continued growth in like-for-like sales.

Five years ago the high street was driven by price discounting, intense competition and deals all designed to get people through the door. While this still exists to some extent, the work done by The Portman Group and the drinks industry to promote sensible drinking deserves a huge accolade.

What we are seeing emerge are some quality, focused and highly branded offerings, where customer service, attention to detail and comfort are of prime importance.

This does come at a cost, particularly in terms of the branding and refurbishment costs associated with a high quality establishment, but pubs and bars like this do seem to have a degree of longevity that will appeal to the City and funders.

Roll out finance, previously a notoriously difficult concept for the banks to get comfortable with, is now seen as a real opportunity to help establish and roll out a quality brand regionally or nationally, in a relatively short space of time.

So, what does the future hold for the high street? It certainly is about the survival of the fittest. The customer really is king these days and those who forget or who doubt this will surely face the consequences.

So investment is the key principle. Investment in people, in premises and in product all play their part - and probably in that order. In such a competitive environment, a poorly delivered product in an underfunded, unappealing bar with insufficient, badlyy trained staff is not going to survive for long. While these establishments still exist, thankfully they are a diminishing minority.

With a smoking ban on the horizon, the next 12 months will be a challenging and interesting time.

Geoff Newton is Head of Barclays' Licensed Trade business​