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What is the future for the UK pub industry?
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Although recent statistics show that UK pubs closed at a rate of 52 per week during the first half of 2009, a third more than during the same period in 2008, it is not all doom and gloom in the industry, says Andrew Cochrane, partner and head of licensing at Derby-based solicitors Flint Bishop.
Whilst it is true that many pubs are closing, there are others that have reacted proactively to customer demand and are continuing to turn in profits. These are generally establishments that have diversified their offering and provide customers with entertainment, good quality food or something a little bit different.
The British Beer and Pub Association recently revealed that branded pubs and café-style bars were opening at a rate of two per week. This flies in the face of the argument that the industry is dying and underlines the fact that today’s pub-goer is looking for something more sophisticated than just a pint and a packet of crisps.
This diversification, coupled with all the basics, like a clean pub, good décor and a friendly landlord, can enable a pub to weather the current storm and remain at the heart of a community.
However there is no doubt that the industry is going through significant change and contrary to public belief, it’s not all due to the state of the economy.
As we all know pubs have been hit hard by the current recession, with lower levels of disposable income leading to a drop in customer numbers. This, allied with the drop in price of alcohol in supermarkets and the higher taxes on alcohol sold in pubs, not to mention the continued effects off the smoking ban, is conspiring to encourage many people to drink at home, rather than visit their local.
Many pubs have also been struggling to foot the cost of compliance, with the increasing number of statutory requirements that have been imposed on them by Government; this can run to the tune of thousands of pounds for something as simple as carrying out work to the building itself, the installation of CCTV systems and the cost of door staff.
Pubs may also be struggling based upon their geographical location, a factor that can be incredibly hard to rectify. Pubs located on the outskirts of towns, neither in the city centre nor in the heart of a village, are finding it increasingly hard to gain passing trade.
This is a common problem for many pubs, whose location may previously have been fairly central, but over time as the centre of the town or city has shifted, so too has its passing trade, leaving the pub with just a select group of regulars and inhibiting the growth of its customer base.
But like all businesses, establishments that do not actively seek new customers through means of differentiation and new product development may find themselves struggling and forced to close.
The future of the British pub industry really rests on the ability of pubs themselves to diversify and adapt their offering in order to attract new clientele.
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