Beer to rise 10p after festive sales drop

The price of a pint of beer in pubs could rise by up to 10p following the 2.5% VAT increase and a disappointing festive season.

A snapshot survey of 112 tenanted and freehold pubs, conducted by the Morning Advertiser​, revealed that almost half saw a drop in sales over the Christmas and New Year trading period.

A total of 46% said sales had suffered with 16% recording a sales drop of more than 20% on last year. Trade was static for 15% of respondents while 39% said sales had increased with 11% recording an uplift of more than 20%.

Almost a third (32%) said bookings for Christmas parties were similar to last year with 43% seeing a dip in bookings and 25% an increase.

Pubs also suffered at the hands of the weather with 59% believing that customers steered away from venturing to the pub during the snowy conditions prior to Christmas.

New Year's Eve remains the biggest draw for most pubs with 46% having their strongest trading day. Christmas Eve was also popular with 26% having their busiest day of the period with Boxing Day next in line and Thursday 17 and Friday 18 December also busy at some pubs.

After VAT rose on 1 January, 68% of licensees have already or plan to increase prices shortly. Last year a further 8% duty rise was added to beer to off-set the VAT cut, which remains in place despite VAT returning to 17.5%.

The majority of licensees look set to increase drinks prices by up to 10p across the board including pints of lager, ale, stout, cider, glass of wine and a measure of spirits with the most likely increase being between 6-10p. Just 1% said they planned to reduce the price of lager, wine and spirits.

However, the average price of a meal looks set to remain steady with 55% not planning to increase prices —17% are planning a 50p increase with a further 14% an increase of up to £1. Just 5% are slashing the cost of a meal.

As for the year ahead, 27% said that beer prices from their pubco was the single biggest issue they faced, while 20% said it was stay at home customers affected by the economic downturn.

A further 12% said duty increases posed the greatest threat, 16% said cheap beer offered in the supermarkets was the main concern while 8% listed rent as the major worry and 5% business rate increases.

The year ahead does not look any easier with over a third (34%) expected to leave their pubs.