Pub and club insolvency rates stabilise, says PwC

Across the bars sector, the same number of firms became insolvent in 2011 as in 2012 - 345. There were slightly fewer in Q4 2012 (85) than in Q4 2011 (97), although Q1 2012 experienced the greatest number of quarterly insolvencies across the two-year period (100).

David Chubb, PwC business recovery partner and hospitality and leisure specialist, said: "The latest insolvency figures for the pub sector show no change or improvement in the 12 months to Q4 2012 when compared with the same period in 2011.

"In fact, the sector saw exactly the same number of insolvencies year on year whilst across all sectors, insolvencies fell 3.6%. This consistency in the pub sector may suggest that the sector is stabilising and this is the normal rate of failure to be expected in a quarter.

"The pubs and clubs segment is in a phase of transition as it strives to recover from the effect of a variety of negative factors during the recession. Closures have been an ongoing feature of the past 3 years, taking out some over-capacity but the notable point is that there are new investors coming in and the existing operators are increasing their capex spend. There is also good innovation in the sector as operators try different offerings.

"Looking ahead, the better performers are likely to be those who adapt best to changes in customer demand or the local market. You cannot change a location of a pub but you can change the offering of a pub - the key is ensuring that the pub meets the needs of its local market. Those who have been slower to adapt and have under invested will continue to struggle.

"In the long-term, we should continue to see investment in the sector from both existing and new operators as market conditions improve."