Pub drinks prices rising at fastest ever rate
The increasingly wide gap between the price of drinks in pubs and the off-trade threatens the survival of many pub operators, warned research out this week.
The price gulf has never been bigger. Researchers at investment bank WestLB say pub prices are rising at their fastest ever rate in comparison to off-trade prices, because of discounts that supermarkets can demand from brewers.
And while supermarkets often sell lager as a loss leader, the price of beer in pubs in rising faster than any other drink. Overall, alcohol prices are rising 1.4 times faster in pubs than in the off-trade.
WestLB analyst Stuart Price said that tenants and lessees were most at risk as the price difference for drinks between pubs and supermarkets grew.
He said on-trade operators with a strong identity, such as pub chain JD Wetherspoon are better placed than traditional pubs, which have little scope to negotiate discounts and no real point of difference.
JD Wetherspoon spokesman Eddie Gershon said the argument was more complex than simple maths. He said: "Price is important, but pubs have always been more expensive than supermarkets. People go to the pub to socialise.
"Wetherspoon certainly isn't interested in doing well at the expense of wholesale pub closures elsewhere - a strong, thriving pub market is in all our interests."
Ted Tuppen, chief executive of Enterprise Inns said: "If your only reason for going to the pub is price, then you might as well buy drink at the supermarket. If you're going because of the quality of the pub, then frankly price isn't that important."
