The pub industry could see up to 2,000 licensed premises disappear over the next three years, due to a growing decline in the on trade, according to the latest research.
A study by AC Nielsen has found that the pub trade this year has struggled due to a series of trends, which are likely to continue to impact the sector well into 2008, and could result in the closure of many bottom end pubs.
The report lists a range of factors, including the bad summer, five interest rate hikes, the economic downturn, high fuel prices, more companies going bust, growing consumer debt and increasing food prices.
All of these concerns when combined with industry-specific trends, such as the real impact of the smoking ban, an 8% to 9% decline in beer volumes, cheaper than ever off trade prices and the focus on alcohol by the health and anti-drink lobby, have led to static on trade sales.
The failure of England to qualify for 2008 European football championship is also set to result in a loss of income for pubs.
Graham Page, analyst for AC Nielsen, said that these trends are unlikely to improve in the medium-term and pointed out that they are all likely to have an impact on the business plans of the major multiple players next year.
He said: “The current trends are putting a strain on beer volumes and as a result I expect to see a shifting and churning of the bottom end of pub estates.
“I believe that lots will cease to trade as pubs and be sold for their alternative use value.
“I estimate this figure could be somewhere between 1,500 and 2,000 pubs disappearing over the next three years.”
Page also said that 2008 is set to see more consolidation, with bigger groups getting even bigger and the smaller ones exiting the sector.
Under the current economic situation, he also sees the potential for one or two regional brewers to merge to create critical mass or for others to sell up while prices are still high.
