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Pubs set for resurgence after years of closures – report

The appetite for craft beer and gin is helping attract renewed interest in pubs from investors, according to the BDO’s Restaurants and Bars Report.

Pubs are set for a resurgence after years of closures as consumers develop a taste for craft beers and spirits, according to a report.

High quality pubs are once again attracting the interest of investors as the booming industry in craft beer and gin particularly continues to attract consumers and create strong returns, according to accountancy and business advisory firm BDO’s Restaurants and Bars Report.

Investor interest has been buoyed by consumers revelling in the prolonged hot weather and England continuing its World Cup run, BDO said.

Quality pubs have proved to be resilient assets Mark Edwards, BDO

It follows a prediction in the Management Consultancies Association (MCA) Pub Market Report that the pub sector is set to return to positive outlet growth within the next five years and that turnover will outpace the wider eating-out market for the first time since 2008.

Mark Edwards, head of the restaurant and bars sector at BDO, said: “Pub numbers have gradually fallen over the last few decades. The trade has been dealt blow after blow with legislative changes, falling discretionary spending, sky high rents and cheap supermarket alternatives.

“But things are definitely looking up. The casual dining market on the other hand remains challenging; competition is high, margins are being squeezed and the future looks tough for those that aren’t best in class for concept and operational performance.”

He added: “Quality pubs have proved to be resilient assets. They have played an important part in our high streets, cities and local communities for hundreds of years and have successfully adapted to ever-changing consumer demands.

“There are a number of exciting, fast-growing managed pub and bar groups that are likely to be on the radar of investors. We can expect a wave of consolidation in the next 12 to 18 months.”

Since 2000, the number of pubs in the UK has fallen by 17%, or 10,500 pubs, according to the British Beer & Pub Association (BBPA).

The decline has been blamed on a number of factors including high taxes on pints, the smoking ban, the increasing price of food and drink and squeezed household incomes.

However the BBPA has said the rate of pub closures is slowing down.

About 1,100 pubs closed their doors in 2015 but fewer than half that number closed in 2016.

British Beer and Pub Association chief executive Brigid Simmonds said: “It is always good to see investment in UK pubs and an acknowledgement of the important part they play for communities and investors.

“In 2016, £2 billion was invested in the UK brewing and pub industry which is vital to achieve the quality which customers expect and to increase productivity.

“Pubs however pay a third of the price of a pint in tax and beer taxation and high business rates are putting at risk their long term viability.”

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