Publicans positive despite rising costs

23-Feb-2012 - Last updated on 23-Feb-2012 at 09:18 GMT

Nearly half of publicans believe their turnover will improve in 2012, despite growing fears about rising energy costs.

In the Publican’s Morning Advertiser 2012 Pub Market Report — an exclusive survey of 500 publicans — 45% predict that their turnover will be ‘up a bit’ or ‘up substantially’ in the next 12 months.

Set against this, 54% of publicans stated that increases to business running costs were of ‘major concern’ to them — even outstripping concerns about supermarket prices.

When asked where the biggest cost increases had been in the past year, electricity bills topped the list with 75%, followed by gas bills at 57%. Business rates came third at 33%.

Despite the threat of rising costs, more than a third of publicans (35%) said they plan to invest more than £10,000 into their business this year. Just 12%, meanwhile, will be ploughing less than a grand into their outlet.

While the report’s general theme is one of cautious optimism, profitability figures for 2011 reveal it’s still tough to make money in the trade.

When asked to compare their most recent tax year against the previous one, about half (53%) said they made less money, while just one third made more.

A better summer and events such as the royal wedding did help to improve turnover marginally in 2011, however. While 45% said their turnover improved in 2011, just 37% said their turnover went down — an improvement from 41% in 2010.

Another positive trend is a reduction in the number who plan to leave the trade this year. At 14%, it is down marginally on those seeking to exit the industry this time 12 months ago.
Publicans said food continues to grow in importance in pubs — reflected by the fact that 87% serve food at most, if not all, times of the day — up from 78% a year ago.

The real-ale renaissance continues unabated as well. Four in 10 publicans (38%) said beer is growing in importance in their pubs, and the same number claimed that beer still accounts for 60% or more of their turnover.

Rob Willock, the Publican’s Morning Advertiser group editor, said: “You have
got to admire the determination and resilience of the PMA readers.

“They are navigating a course through some of the toughest trading conditions in a generation and remaining optimistic about the future.”

To read the full report go to page 47 of the digital edition.