Trade anticipates further loss in profits
The dire financial state of many pubs is revealed in a survey of 500 tenants carried out by the MA.
The most startling statistic is that 10% of pubs are operating at a loss or zero profit. Also, as many as 78,000 full and part-time jobs may have been lost if the survey results replicate the situation across the 50,000 pubs in England and Wales.
The survey found the average profitability of a pub had slumping by almost 15% in the past year to £24,180. Of equal concern is that more than half of survey respondents (54%) predicted profitability falling even farther over the coming year.
The average pub turnover has only dipped by 1.9%, but a significant number (9%) reported drops of more than £100,000, many of which were in the £300,000 to £400,000 turnover bracket.
Nearly six out of 10 pubs (57%) had been forced to shed staff, with an average of 2.75 redundancies per pub.
The smoking ban was cited as having the biggest impact on business: three times as many licensees (57%) blaming the ban for lost trade as those citing consumer-spending slowdown as the key factor (19%).
Pubs where trade was down reported falls ranging between 5% and 40% with the average drop being 18%.
Pubs that benefited from the ban reported trade was up within a range of 2% to 20% with an average of just less than an 8% increase.
The figures indicate that claims about pubs being repatriated by non-smokers after the ban were over-optimistic. Despite the hardening financial climate, licensees reported little assistance from their pubcos, with 59% citing them as "unhelpful".
The areas where hosts wanted help from pubcos were: better discounts on products (53%); rent reviews (29%) and interior or exterior pub revamps (19%). Two-thirds also said their BDM was "not at all creative" in helping them build business.
n State of the nation — p52
Globe reflects gloomy trends
Beer sales at Globe Pub Company, the 437-strong tenanted business owned by Robert Tchenguiz, are down by 8% in its most recent quarter to 1 March.
Globe had 35 pubs paying nil rent and 10 more with rent concessions in place. The company's rent roll dropped £300,000 to £14.6m for the quarter, which reflected the impact of 17 tenancy changes at the start of 2008. The number of tenancies-at-will stands at 68, in line with the quarter before, but higher than the 49 at securitisation in September 2006.
The company had 12 pubs closed in February,
a slight reduction from 14 in the quarter before, but still much higher than at the time of securitisation when it had two venues closed.
n Business Opinion - p20
Beer volumes in decline: Nielsen
Beer volume figures from Nielsen show an 8% decline in January 2008 compared to the year before.
Standard lager volumes dropped 6%, premium lager 12%, standard ale 8% and premium ale volumes 11%. Nielsen consultant Graham Page said the latest trends were "pretty sad", with beer declines worsening and other categories suffering — even ciders growth is falling back.
Page said: "I think we'll see MAT declines nearer -7% to -8% by the end of February. March's early Easter may help, but it will get lost in April and May. And the Budget added misery."