Insights
The latest figures from the Office for National Statistics (ONS) make for sorry reading for Britain’s pubs – at least on the surface. In the past 10 years, nearly a quarter (23%) of pubs in the UK have closed, at a rate of around 18 closures per week, with the total number down from 50,000 pubs in 2008 to around 39,000 pubs in 2018.
But all might not be as bad as it seems. Although lots of pubs have closed, the total turnover of pubs and bars has held up, remaining flat since 2008, once inflation is taken into account.
Meanwhile, employment figures show that there are 6% more jobs in pubs and bars than there were in 2008. The ONS suggests this rise could be due to pubs diversifying into food, which always requires a much larger workforce.
The optimist in me concludes that it’s more of a mixed picture for the industry – there’s still plenty of potential trade, as long as pubs are providing the best service and product they possibly can, and that they’re prepared to listen to their customers feedback. Enabling improvement in their offering.
Taxes cutting into profit margins
Before anybody accuses me of only seeing the positives, I’m well versed in the difficulties the sector is facing. Pubs are often having to make a little go a long way as cost of product, beer duty, business rates and labour continually eat into profit margins. According to industry body ‘The Campaign for Real Ale’, a third of the cost of a pint is now made up of various taxes.
The UK Government has made attempts to help out small operators by reducing Business Rates by a third for pubs, shops, restaurants and cafes with a rateable value of up to £51,000. But research by the Save UK Pubs advocacy group found that many pubs have seen their rateable value increasing, making them ineligible for the discount.
Pulling on consumers’ heartstrings
Few people would argue that pubs are challenged when generating enough profit to make staying open a viable option – especially when you factor in the downward trend in UK adults drinking alcohol: according to research from BMC Public Health, nearly 30% of young people in the UK don’t drink alcohol.
However, as summer 2018 proved with its heatwave and World Cup excitement, pubs can still hold a special place in people’s hearts. The challenge, then, for pubs is to come up with an offering that engages the emotions of their target consumer; consistently delivering so they keep coming back for more.
While it might be a stretch to argue that pubs can reclaim their role as the beating heart of their community, there’s enough evidence to suggest that they can position themselves as a thriving venue that locals are happy to call their ‘local’.
For this to happen, you need to become a reliable destination for guests. HGEM can provide you with the insights needed to deliver an experience that combines brand personality with reliability. We can give you a comprehensive view of your reputation and the things that influence it, so that you can take the relevant action to be that ‘local’ that we all love to visit. For more information on how we can support you with this, please call 01225 470999 or email enquiries@hgem.com.
