Stop worrying about pubs

Last week saw the publication of another report predicting wholesale pub closures across Britain. Only in February, Camra, the real ale group, warned of 1,300 pubs under threat due to urban redevelopment plans. Now, PricewaterhouseCoopers (PwC), the international accountancy firm, has weighed in with predictions of up to 5,000 locals liable to close in the next four years. The smoking ban, falling beer sales and restrictions on drink promotions will be the cause, it says. Quite how these calculations are made is not entirely clear, but putting a number on losses – whether its pubs, jobs or hospital beds – is always a good headline grabbing PR devise. There’s no argument that the pub sector is under real pressure at the moment, and the smoking ban may well prove as significant a catalyst for change as the Beer Orders were. Back then, there were warnings of 10,000 pubs disappearing. Nowhere near that number closed. In fact, what followed was a surge in new on-licences that saw not only more pubs and bars opening on the high street, but much bigger premises too. As always with change some adapt better than others – while some don’t adapt at all. So it will be with the pub market. As I wrote only last month, even if a few thousand pubs were to shut down should we be worried? If there is one truism about the British pub, it is that it is a resilient institution that has weathered many storms over the decades and centuries through evolving to meet new demands. Earlier this year, PwC urged pubs to innovate and cut costs warning that their sales could dip by as much as 10% post the smoking ban. Good advice. This last week it advised pubs “to think in terms of a short-term approach of cash generation, rather than profitability, which includes promotions and price cuts where possible.” This looks less sensible. Anyone who witnessed how cut-price alcohol offers almost brought the high street bar business to its knees only a year or so ago will know the dangers of price-cutting. Wetherspoons now knows it can’t beat the supermarkets on cheap booze, but it can win on value-for-money food. That’s where more of its emphasis is going and is reflected in the recent Peach Factory report that saw JDW come out as the nation’s second favourite place to eat out after McDonalds, judged on whether people had eaten there in the last year. It is almost trite to say that food is the key to the future for pubs, but it’s true. The fact that Robert Tchenguiz is willing to pay top dollar to secure the La Tasca tapas restaurant chain to put it alongside Slug & Lettuce and Ha! Ha! in Laurel Pub Co’s food-led division says it all. That is the clearest signpost to where the pub market is going. The distinctions between pubs and restaurants, bars and casual dining, are coming down. As La Tasca has demonstrated, drinking-out and eating-out now go hand-in-hand. It might be more productive now to stop counting pub closures and start counting restaurant openings – and where do you draw the line between a pub and a restaurant anyway? There is certainly no time to sit around worrying about it, when the good operators are out there meeting the challenge already. Peter Martin is the co-founder of M&C Report, and founder of the Peach Factory and Peach Network