No miracles needed — just be resourceful
The number 39 has been on my mind — not just because I stumbled on a film version of The 39 Steps being screened at the weekend. It is the number of pubs claimed to be closing each week during the second half of 2008.
This figure was published in January. Nearly three months later it is still being used as a stick to beat the sector with.
Obviously it is in my own interests to highlight as many positives in the sector as possible. At times over the past year it has been hard to find any, but since the new year, a few rays of light have started to shine through.
This is a good time for established local operators who have a sound trading history and are looking to add a site to their estate.
With banks increasingly stringent with lending criteria, a buying vacuum has opened up in regional markets, into which established local operators have started to move. Faced with a business that can show years of continual, stable growth, banks are willing to lend and back local entrepreneurship.
Since the start of the year, the majority of businesses sold through our 16 regional offices — over 75% — have been bought by established local operators. Some have been looking to acquire a second business or grow local hospitality portfolios. Others want to purchase the unit next door and increase their footprint in their area.
That is not to say there isn't support for first-time buyers out there. Christie Finance has helped a number of new entrants to the sector secure the funds to acquire their first pub over the last three months. While it is good to see funding can be secured, it is also pleasing that people still want to enter a sector that we are led to believe is on its last legs.
On top of this, we have seen a 12% increase in pub transactions in the first quarter of the year compared to the same period in 2008, again suggesting that many still see a future for the sector.
Many operators are also diversifying, cutting prices or introducing promotions to generate trade, while the majority of the national pub companies are investing significant amounts of money to make sure their tenants are in the best position to operate long-term viable businesses.
The 39 Steps features Richard Hannay, an all-action hero with a stiff upper lip and a miraculous habit of getting himself out of sticky situations, as he is chased across England and Wales by a group of spies and the police.
The pub sector shouldn't need a miracle, but it will need to show, and is showing, the same levels of resourcefulness as Hannay to emerge stronger from these challenging times.
Neil Morgan is director and head of public houses at Christie+Co.
