Thursday, 5 August 2010

Holed below the waterline?

Some gloomy, but sadly all too realistic words here from Robert Sayles about the decline of beer sales in the on-trade. He describes the 6.3% year-on-year fall that I referred to the other day as “calamitous”.

The tied sector is, it must be said, looking increasingly uncompetitive in comparison. It is an unpalatable fact but many of us are now in the business of selling a product that less and less want to buy, at a price that less and less can afford to pay. Hardly a recipe for long term success, is it?

For the first time I have to say I am genuinely fearful of what lies ahead, we are in freefall with little sign of respite. An imminent rise in VAT, increasing pressure on disposable income, high unemployment and inevitable increases in beer prices ensure that difficult times lie ahead.
I have never claimed that the smoking ban was a monocausal explanation for the decline of pubs, as obviously it began well before 2007. I set out a number of reasons for it here. However, the ban has undoubtedly made matters much worse, and to my mind Sayles understates its impact. But it is clear from what he says that the underlying problem of the pub industry is not business structure or incompetent licensees, but a straightforward lack of demand.

There’s no easy answer or quick fix, but the last thing that is needed is government measures making things worse. The pub industry might well feel that Ronald Reagan had it right when he said: “The nine most terrifying words in the English language are, ‘I’m from the government and I'm here to help.’”

Pubs as we know them are not going to disappear completely, but it’s easy to see them over the next twenty years being cut back to a small rump that only exists in the kind of socially mixed, prosperous urban areas that provide the environment and culture to support them. There are many pubs still open but obviously doing a very thin trade that must be candidates for further closures in the future. I remember the days when, approaching the door of many pubs, you would be worried whether you would be able to get a seat. All too often nowadays, the worry is more that you’ll be the only customer.

And, sadly, CAMRA, happily ensconced in their love-in at Earl’s Court this week, cannot or will not see it, and continue to delude themselves that once hard times are past a somewhat smaller, but revitalised pub industry will spring forth.

20 comments:

  1. But who is to say that CAMRA is wrong and you are right? While CAMRA may be too optimistic in its outlook I do feel that yours is far too gloomy.

    If you don't mind me saying so, it is these days all too easy to distinguish your blog from a ray of sunshine. Have you thought of renaming it The Pub Miserabilist?

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  2. And that on the day we learn of the impending closure of the Swan at New Mills Newtown which, combined with other local closures over the years, will leave Newtown entirely publess. Not exactly a ray of sunshine for pubgoers there, is it?

    And the first quarter that we see a year-on-year increase in on-trade beer consumption, I'll happily buy you enough beer to put you under the table :p

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  3. Many pubs are simply crap. Yesterday, a lovely day, a pub overlooking the sea and a queue of punters. What does the pub do? Put one person behind the bar doing coffee's, meal orders and booze. Exit many punters.
    Many other pubs have made absolutely NO effort to provide cover/shade and seating for smokers.
    In my own small town 2 more pubs are going to auction next week. I'm not surprised. The punter is looked upon as a nuisance.

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  4. Mudgie

    The truth often stings those whose
    lies and deceptions lie in tatters.

    It is beyond the comprehension of
    reasonable and sensible men and women to hear people suggesting the smoking ban has only had minimal effect on the trade.
    The same method of mass brainwashing on the issue is similar to the finely tuned
    techniques employed by Messrs
    Hitler,Hess and Goebbels on the
    educated classes of 30s Germany

    As for Mr Clarke above
    well what can we say?


    The empty pub on a treeless lane

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  5. Anonymous hit the nail on the head with his/her comment about poor service. We experienced exactly the same thing on our first day in the Isle of Man, for the CAMRA AGM. A pub full of people (both tourists and CAMRA members) and one poor girl left to manage two bars, serve drinks and sort out the food orders. When the food finally arrived, it was extremely poor value for money and was only edible by virtue of the fact we were starving hungry.

    Unfortunately, this is an all too common experience. The pub industry really needs to up its game. Far too often the wrong people are running the nation's pubs; people who either couldn't give a hoot, or people who are only in the trade because they think they can make a quick buck.

    These are the pubs that are closing. Yes, people's life styles have changed, along with their expectations. Licensees that recognise this, and who know what pub-goers expect today, are the people who are running successful pubs. It's just a pity there aren't more of them about!

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  6. It is important not to fall into the trap of saying "pubs are closing because they are crap", which was a favourite of Jeff Bell of Stonchbeerblog fame.

    Yes, many pubs offer crap service, but that isn't the reason they are closing. In the 1970s, pubs were selling twice as much beer as they are now, but many were heroically awful in a way that is unknown now.

    It may be the case that Pub B closes instead of Pub A because it offered worse beer and service, but that most emphatically isn't why pubs are closing en masse.

    And, in some cases, might poor service be the result of poor trade, not the cause?

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  7. Regardless of the unfortunate fate of the Swan in New Mills, I still think you are being far too gloomy in your prognostications. While I don't doubt your strength of feeling here I do think there is a touch of the Private Fraser about this blog at times. I mean, it's not a very happy blog is it?

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  8. It is of course described as "A jaundiced view of life from the darkest recess of the saloon bar...", so you might not expect unalloyed joy.

    But, when the smoking ban is relaxed, then I will celebrate.

    When the government say they won't cut the drink-drive limit for the foreseeable future, then I will celebrate.

    When the government say they won't increase alcohol duties above inflation, then I will celebrate.

    When the government drop their ludicrous anti-drink propaganda, then I will celebrate.

    When the Railway at Heatley reopens as a mainstream pub, then I will celebrate.

    Until then, John, it will be a continued parade of facing the unpleasant facts.

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  9. @John

    If only there was some empirical evidence not to be gloomy. Ireland's smoking ban came in March 2004 and there were 6,000 pubs. Six years later they have lost 1,500, 25% of their pubs. Out of the remaining 4,500:

    "The study by the Drinks Industry Group of Ireland (DIGI) shows that of Ireland's surviving pubs one in three is set to shut. Over a third - that's another 1,500+ pubs - now say they will struggle to survive into the future, despite massive efforts within the industry to woo more punters."

    So therefore 1,500 + 1,500 = 3,000 then since the smoking ban half of all Ireland's pubs would of closed or be closing.

    The aggravating factor in Ireland is the crackdown on drinking and driving.

    Alas John the smoking ban started a chain of events that in Britain and Ireland that could lead to an end of an institution.


    http://www.thepublican.com/story.asp?sectioncode=16&storycode=65627&c=2

    http://www.irishtimes.com/newspaper/ireland/2010/0114/1224262291940.html

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  10. I am much more likely to be convinced about a dubious future for (some) pubs when you quote about the shocking price differential between home drinking and pub drinking and when sensible people talk about the dismal offering in a lot of pubs, than I am by other obsessions such as smoking.

    The smoking ban has probably contributed to the demise of plenty bottom end pubs, but while these might well be missed by a few, they were likely to have been finished off sooner or later by pricing and other social factors anyway. Sad maybe, but likely true and the effects of the ban in smoking have likely been felt and worked their way through the system by now.

    Much is said by your good self about how pubs always used to be filled and a lot were, but the price differential between the on and off trade has never been so big as it is now. There has been an insidious creep in this and this has had a drip drip effect on pub going. It hasn't been sudden but hard times mean that that difference to many becomes too much.

    The avaricious pub companies have a lot to with this aasn they brought a huge amount of debt that previously didn't exist into the trade and of course each closure where the site is sold below book and loan value, means the debt is heaped on others. Poor service is endemic. Imagination in the trade is limited and pricing is a constant factor. Homes are comfortable now and have all the facilities some need to give the pubs a miss, especially when they can drink the exact same product at home for s fraction of the price. That was never so in the halcyon days you like to recall. Complicated social factors exacerbate this situation.

    But there are and will continue to be good pubs fulfilling local needs and doing a great job. You may have to seek them out a little - but then you always had to seek out the best.

    As for deluded CAMRA - I doubt it. CAMRA hardly sees things in the rosy way that you describe. Real ale suffers from the trade being in a bad way too and we know it. But the answers to attracting customers are timeless. Offer them what they want and they will come.

    Being a prophet of doom is a lonely job Mudgie. Someone's got to do it though, if only to give us head in the clouds lot something to think about.

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  11. Mudge, why care? Get yourself down Tesco. Collect your clubcard points for even bigger discounts. Enjoy a beer in your nice home. It's the future.

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  12. 'Curmudgeon said...

    It is important not to fall into the trap of saying "pubs are closing because they are crap", which was a favourite of Jeff Bell of Stonchbeerblog fame.'

    But its important not to ignore the fact the many pubs are crap.
    1.Many pubs simply do not have enough staff to serve the customers, people walk out!
    2. Many pubs have filthy tables full of empty glasses, people leave.
    3. Many pubs have had spent thousands re-furbishing pubs and then staff them with kids that haven't a clue and do not want to be there.
    I've visited a 'sports bar' which had live rugby on about 10 screens, but the volume was turned OFF and the bar staff were playing rap/disco music for themselves. People walked out after complaining and getting no interest from the staff.
    I've literally lost count of the amount of pubs I walked out off because the queue is too big and there is one member of staff serving.
    Likewise the pubs that will take your money and then expect you to stand outside in rain/snow/sleet for a fag.
    Until they treat the customers better more and more will shut.
    The smoking ban without doubt has been catastrophic for pubs so you would think that the remaining customers would treated better and provided with better facility's. I have yet to see this happen.

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  13. Strolled past the largest saloon
    in town last night.Classy joint,
    ale in top form(£1.59p a pint),
    efficient attractive staff.
    Nice summer evening,no blaring TVs.
    And what,160 person venue,8 customers and 4 of them were stood at the door smoking ,they cant even take their beer with them due to by-laws.
    Fact of life
    My local pub once had about 50-60
    regulars of whom only 10-15 were
    smokers.The smokers drifted away,
    the pub went under ,now the non
    smokers have nowhere.
    Is that to difficult to comprehend
    for self elevating denialists.


    Admit the truth and stop willy nillying about dodgy staff and
    life style changes FORCED ON US


    The Ferryman

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  14. I don't think the price of beer in pubs is a major cause of the closures. I have been investigating historic prices and earnings data. A pint of Pedigree cost 21p at the Whitworth Hotel in 1976. Inflation calculators are not all the same, but it works out somewhere in the region of £1.40 at today's prices. After tax median personal income has risen by a factor of 1.6 just since 1992 (the only statistic I could find). The £1.59 quoted above is therefore very affordable by any measure. Even £2.50 is, after taking into account the real rise in wages. Supermarkets have always sold cheap beer, but when you hand £2 or £2.50 over in a pub, you are not just buying a pint of beer, but also renting a space in the pub. Since I can't smoke, I wouldn't pay even a small amount to rent the space. For whatever reason, many other people now won't pay the rent. Children in pubs since the smoking ban doesn't help. For those non smokers reading this, can I just say that many smokers will not spend time in pubs. We do not enjoy in the slightest getting up and going outside. We put up with restrictions at work because we paid to do so, but not when we are paying. Don't kid yourslves that the people sitting in beer gardens wearing coats are enjoying themselves. They are not. Good luck to CAMRA and David Miliband but pubs as we know them are finished.

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  15. Thank you for reminding me Anonymous.

    Kids in pubs are a nightmare. Add that to my list of what's wrong with pubs.

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  16. "When the government say they won't cut the drink-drive limit for the foreseeable future, then I will celebrate."

    Just before the general election, Tory transport spokesperson Theresa Villiers said her party wouldn't cut the limit: “We do not believe the case has been made to justify such a change. We would focus on enforcement of the current rules.”

    I don't normally agree with Tories, but here I do. I wonder whether they'll stick to this policy now they're in Government?

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  17. The question is whether the current gloomy stats do represent an existential crisis for pubs as such, or whether it is just an "adjustment" that will eventually see a leaner and fitter trade emerge. I suppose only time will tell, really. But ten years of 6.3% declines will halve on-trade beer volumes.

    And it can't be put down to the rise of Wetherspoons and box bars, as their sales are included in the total too.

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  18. For all the accusations from Mr Clarke of negativity, I don't really think I was saying anything that Robert Sayles' article didn't say.

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  19. As you know, Curmudgeon, we don't agree on everything. But we bloggers do need a diversity of perspectives: yours, mine, John Clarke's, Tandleman's, and everyone else's, because sometimes other people will come up with something we haven't thought of. But if we run blogs on the basis of a single point of view, it will be both boring and incomplete. It may well be that your prognosis of doom and gloom proves right. I hope you're wrong (but then so do you), but dismissing your "jaundiced" view out of hand is in my view a mistake.

    Even though we don't agree on the smoking ban. Damn! Wasn't going to mention that ...

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  20. Offer them what they want and they will come.

    That's the problem, isn't it?

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