20% of pubs suffer as turnover drops

One in five licensees say their turnover was down "substantially" in 2010 — although most believe things will improve this year.

An exclusive survey of 500 licensees for the Morning Advertiser's Pub Market Report 2011 found 19% of licensees had seen a substantial dip in trade last year.

And 21% revealed their profitability was also down "substantially" during 2010.

But there was optimism for the year ahead, with 72% predicting turnover will be up or flat during 2011, compared to 28% who believe turnover will be down.

A huge 64% claim cut-price alcohol sold by supermarkets has been the single biggest detrimental factor for their business.

Licensees also blame the rising costs of utility bills, particularly electricity, followed by gas, business rates, staff wages, Sky subscriptions and rent as having a major impact on their bottom line.

And these issues remain major worries for 2011 as 49% claim running costs are their top concern.

Staying put​

Despite the economic climate, 71% say they have no intention of leaving their pub this year while 60% have no intention of taking on another pub, preferring to concentrate on their existing businesses. Food, beer and events were ranked by respondents as the three most important growth areas, followed by tea and coffee, soft drinks, spirits and live sport.

The majority of pubs offer food at least at lunchtimes, with just 22% offering meals throughout the day.

A further 8% offer food only at lunchtime, and 14% of licensees now offer breakfast.

Meanwhile, the majority of licensees are planning to target consumers with cask-beer festivals and events around cask ale.

Resilient​

The PMA Team, group editor for the Morning Advertiser, said: "This is the first insight into what has really been impacting on licensees' businesses in 2010 — and how they see the year ahead.

"Despite a decrease in consumer spending and a difficult market the trade re-mains resilient and licensees continue to remain optimistic about the year ahead."

Of those responding to the survey, 40.6% were leaseholders, 38.2% freeholders, 12.6% tenants, 7.9% managers and 0.7% franchise-holders.

Key stats​

• 68% are members of pubwatch and/or Challenge 21

• 45% see their BDM once every two or three months

• 50% say their key customer group is between 41 and 60-year-olds

• 4% of pubs target the 18 to 24 age range

• 42% say beer accounts for 61% or more of turnover

• 22% of pubs offer meals all day

• 14% offer breakfast