Pub closures have accelerated since the introduction of the smoking ban in July 2007, with PricewaterhouseCoopers (PwC) predicting that around 6,000 licensed premises may close in the next five years.
The accountancy firm has revisited its 2007 forecast that 5,000 pubs would close by 2012, after seeing 1,400 close last year alone.
The company said that it expected one in three of the impacted pubs to cease trading this year.
Michael Jervis, partner, advisory, PwC, said: “Since our original prediction last year, the rate of pub closures has accelerated: we now expect to see 6,000 pubs closing by 2012.
“The UK currently has 76,000 pubs – 10,000 of which are believed to be loss making, so the 6,000 is only just over half of the loss makers."
The research showed that there were several other factors which have also impacted on the loss making pubs.
Jervis said: “The majority of pubs suffering distress are wet-led community pubs losing out to supermarkets. Some will also find themselves losing out to the larger, more recognisable pub chains. In addition, the 2007 ban coincided with a very wet summer, reducing the customer’s ability to sit outside, which would usually keep them in the pub for longer periods of time.
“The absence of any home nation side in the 2008 UEFA European Championships is a factor this year, and the impact of the current squeeze on consumer spending is exacerbating this. In addition to these factors, those pubs which cease trading have been turned into retailers, gyms and residential property – an exit route which is proving even harder in the current climate.”
PwC suggested that pubs should prepare their businesses for the current economic climate by managing investment cash carefully.
Jervis pointed out, however, that if it was already too late and the loss making sites could jeopardize the rest of the group, it was best to consider restructuring solutions such as pre-packaged administrations and accelerated merger and acquisitions.
