MyShout

Despite recent reports of multiple pub closures, it's not all doom and gloom, says Colin Wellstead

The subject of pub closures frequently hits the headlines, particularly as the smoking ban approaches. PricewaterhouseCoopers estimated recently that about 5,000 more pubs will cease trading by 2011 — roughly 20 a week.

While a number of pubs have closed, including many of the least viable, and the ban will claim more victims, it's not all doom and gloom in the industry.

According to the Monopolies & Mergers Commission's report on the supply of beer, published in 1989, there were 78,598 pubs in the UK in 1986.

Today, the British Beer & Pub Association says the total is closer to 58,000. In the last 20 years, 20,000 pubs have closed at a rate of about 20 per week; this figure ignores many pubs that were redeveloped because they occupied prime development sites. This trend continues, with a significant number of pubs sold for higher alternative-use values.

Adapting in the face of adversity

Today's British pub industry is very different to that of 1989, and it is constantly evolving, particularly in the face of multiple challenges. Despite having to deal with social issues, licensing changes and the smoking ban, most pubs have emerged with flying colours. I have no doubt that the industry will demonstrate resilience and initiative when the smoking ban is fully implemented across the UK. The ban has been coming for a long time and, having adjusted to smoking bans on aeroplanes, in airports, shopping centres and sports arenas, the country is ready for it.

Any major change produces winners and losers. Pubs struggling against the competition and choosing to take a negative view — almost resigning themselves to failure and blaming industry changes - will lose. And wherever there's a willingness to adapt, winners can be found. Operators finding ways to attract new customers — or keeping existing customers' interested — are much more likely to succeed.

Pub companies have responded well to industry changes, by recognising new opportunities and re-inventing or refreshing pub concepts to satisfy customers. Although beer consumption has fallen, people no longer visit the pub just to have a drink.

The leisure-dining sector shows strong growth and, as UK expenditure on eating out exceeds the amount spent on food products consumed at home, food is at the heart of many pub operators' expansion plans.

Wet-only pubs can still play their part

We only have to look at some of the pub industry's success stories, such as JD Wetherspoon (JDW), to realise it's still possible to develop effective concepts. In the 1980s, JDW started serving food all day. Since then, the company has steadily built a reputation for quality and value of its food and today it's recognised as much for its meals as the quality of its drinks.

A recent Peach Factory report, Eating Out and the Consumer, showed that in the last year, 38% of adults had eaten at a JDW pub, placing it second only to McDonald's as a popular place to eat. Good food could be a key to success for many pubcos.

But predictions that food is essential for a pub's survival are off the mark. Wet-led pubs will still have a place in the pub market. Long may they survive.