Struggle for power in pub market underlined in new report
The struggle facing the industry as 2008 continues has been laid bare by new research of the UK's top 100 pub companies.
Figures from Plimsoll Publishing suggest that pub sales are simply not keeping pace with the level of investment going into the market.
And what the research house describes as "massive congestion" in a sector in which the UK's largest 100 pubcos now control 97 per cent of the market - up from 93 per cent two years ago - is seeing the major companies fighting each other in a headlong battle for market share.
Of the 100 pub companies surveyed:
• 37 showed no sales increases at all
• 27 are selling less than they were two years ago
• 74 companies have failed to increase sales at the same rate as their investment
• 51 companies increased their debts simply to hold their place in the market.
The value of these 100 companies has fallen by around 40 per cent in the last 12 months, adds the report.
David Pattison, senior analyst with Plimsoll, said: "Following the last few years which have been largely profitable, business leaders have been keen to invest heavily, and in turn have borrowed heavily. Yet due to the turbulent economic climate of 2008 they are seeing very little by way of return.
"This ambitious investment strategy has left some companies in severe financial danger."
Pattison suggested that more companies in the pub sector will be looking at their business models, staffing levels and the viability of ongoing projects in an attempt to keep a grip on costs - and that the time is ripe for more acquisitions in the sector.
