I got a bit riled this week by someone, who in some attempt to be friendly (I'd rather he didn't) asked how the pub business is doing. I said 'Awful, of course' and he went into some long spiel about how a pub near him is doing well, because they've appointed a chef and serve two meals for £30.
I replied rather curtly that a pub isn't going to prosper on doing 2 meals for £30. Actually that's an over-simplification, which I'll explain later. It annoys me when people who ought to know use one occasionally-observed anecdote as evidence to disprove hard data collected systematically and widely - an average of 40 pubs are closing each week.
In these economic times, I am not sure whether the pub industry is hit harder than other retail sectors, but from everything I know, having studied the subject for several years, there are several factors.
The '40 pubs closing every week' does not take into account that licensed-trade premises are also opening and flourishing, typically in High Street locations or in out-of-town 'retail villages'.
Here are just some of the reasons that pubs are closing.
Previous over-provision, especially on estates and urban back-streets, relying on a white male working class population in areas which are now inhabited by people from more diverse cultural backgrounds with no pub tradition and in some cases no alcohol-consuming tradition; also by those, influenced by education and aspiration have a leisure life that extends beyond the geographically closest pub;
A general deprecation of lunchtime drinking in most workplaces (a sharp contrast even to when I entered the workplace 20 years ago);
Large numbers of people (but by no means all) not wishing to drink-and-drive coupled with an ever-increasing reliance on the car;
Lack of innovation and complacency in pub management at both the company and local level - this can include stocking of poor quality wine, for example, or disregard for decor, or women's loos without dispensing machines/disposal bins/mirrors etc;
The smoking ban, which has deterred many people from popping into the pub eg on the way home, and hasn't attracted large numbers of people who previously stayed away - except for parents of small children, which then deters other customers!
A business model built upon an assumption of local pubs being run by married couples who therefore only need one-and-a-bit salaries!
Assumption that licensees don't need a living wage because of the accommodation provided;
Market domination of big chains that can buy beer etc in large quantities just before expiration date confident that they can turn it over quickly (Wetherspoons are notorious for this).
The tied-lease which means that the leaseholder is obliged to buy products from the brewery/management company at a premium rate - £70 a barrel six years ago! (A standard barrel holds 288 pints).
Also, typically, if a leaseholder invests in refurbishing the premises, or works hard to increase turnover, the breweries/pubcos tend to increase the rent to reflect the higher value of the business!
The obvious price differentials in drinking at home as opposed to drinking out (although this isn't a new phenomenom);
A greater tendency for people to eat out, even if it's only at the Indian or a pizza place, which diverts.
The pub my acquantaince referred to may be in a good position to buck several of these trends. Successful pubs are often run on the back of a decent catering operation. But that won't survive on occasional Sunday lunch alone. And a pub has to decide whether it is in effect a restaurant serving up 'Modern British Cuisine' - at a price, or a place where people know they can get a decent if unexciting freeze-and-nuke prepackaged meal. Either approach has risks.
Location helps, a lot. Being on a High Street in a not too rundown area. Or being in a 'tourist' spot. Not necessarily the famous international tourist places, but perhaps a place that attracts people from the region or sub-region.
Competition is interesting. If you're the only pub in the village, people will go there because of the lack of alternatives. Alternatively, when there is a critical mass of good places close to each other, people will go to the town/village/parade and then decide which of several establishments to go to.
But most pubs depend heavily either on a core set of regulars or on a changing-but-predictable crowd. A local pub that attracts about ten people who drink 5-10 pints most nights, or one near a cinema or railway station that gets a steady stream of changing people. However many prosperous couples go to a country pub once a month for a '2 for £30' meal, two pints for the bloke and a glass of wine for the lady, it isn't going to survice on that trade alone.
