The State of London’s Pubs in 2016
In March 2015, we wrote a piece about the pub sector, claiming that new innovations, the rise of craft beer and a firm move towards gastro pubs had reversed the trajectory of a great British establishment.
Now, a year and a half later, we return to the subject to see how the area has developed.
In a year that has brought more pub closures and Brexit, what we find is a market in full transition: No longer is the classic daytime pub profitable, what is required is an added value proposition.
Here, we show how independent and chain operators are embracing this new world to grow the sector, saving the pub as they do it.
Pub closures slowing
For operator, customer and everybody in between, a good piece of news has to be that while pubs are still disappearing from our streets, the rate of closure has slowed from 27 a week to 21, according to the Guardian.
This shows that 2016 – as predicted – has been a year of growth for the industry. But why are pubs still on decline?
The Guardian reports that the trend has been attributed to factors including pub prices comparing unfavourably with the cost of alcohol in supermarkets and changing cultural habits, with more people entertaining and enjoying a tipple at home.
Another common issue is large chains disposing of existing pub property, selling or redeveloping premises for other purposes, such as housing or supermarkets.
Despite these persistent issues, the rate of decline is slowing.
The Brexit factor
Of course, the last year hasn’t been straightforward due to Brexit. Britain’s decision to leave the European Union has had an impact on the leisure and hospitality sector.
We discussed many of the repercussions in a recent article following the referendum result. According to one poll, half of small food service operators – including pub owners – said leaving the European Union would reduce red tape. One could speculate that this has contributed to the slowdown in closures.
As we argued, however, building new pubs historically means employing skilled trades people from the continent, which will now be more restricted.
With the sector in flux, the market is relying on outside pressure to see closure decisions turned around and to bring innovation to what has – until recently – been relatively stable.
Calls for licensing stability
The British Beer & Pub Association (BBPA) have asked the Government for greater stability in the licensing system. A House of Lords Select Committee inquiry on the Licensing Act 2003 is about to take place so the request from the BBPA comes at an optimum time.
Peers will begin taking evidence later this month, with BBPA Chief Executive Brigid Simmonds scheduled to appear on 18th October. Perhaps this could lead to legislative changes to protect pubs.
London’s night czar
Sadiq Khan has already made London’s nightlife a top priority, with cultural life one of his “top four” priorities. He is now looking to appoint a “night czar” to ensure that London’s pubs and restaurants are protected. The plan is to ensure that “grassroots” and independent venues are not forced to close.
Faced with the trend of local pub closures, some councils are taking action to use a special piece of legislation – an “Article 4 direction” that will force bars and pubs to seek permission from the council before being repurposed or knocked down.
This has recently happened in Wandsworth, south London, where 120 bars and pubs have been placed under additional protection.
It seems that there is huge opportunity in the market at the moment for pub owners looking to renovate their premises or for those looking to take up the exciting challenge of pub ownership.
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