Pub insolvency rate slows, says accountants

Pub insolvencies have scaled back to levels not seen since the start of the credit crunch, according to leading accountants PricewaterhouseCoopers (PwC).

Although the UK was still on course to lose up to 4,000 pubs by 2012, PwC's director of leisure Stephen Broome said the three months to March 2009 had seen insolvencies fall.

"In mid-2008, insolvencies in the sector increased by 120 per cent and 97 per cent respectively over 2007 and 2008 levels," Broome said.

"In contrast the rise in insolvencies from the first quarter 2008 to the first quarter this year was only a third, perhaps indicating a respite in business failures for the time being."

Broome said many pub groups had seen some benefit from December trading while the prospects of a decent summer and many Britons deciding to take their holidays in this country could provide an uplift for licensees.

However PwC noted there was an "alarming" rise in the rate of insolvencies in the restaurant sector.

The firm said insolvency statistics showed 186 restaurant companies joined the insolvency register in the three months to March 2009, a "much greater number" of failures than pubs and hotels combined.

However the majority of failing restaurants businesses were smaller, often one off restaurants, at the lower end of the market, Broome said.

"The branded restaurant market on the other hand is still very popular with many UK consumers, as diners shun the risk of experimentation in favour of the safer option they provide," he added.