Legal advice: Are poor high street sales affecting pubs?

By thePublican.com's team of legal experts from London solicitors Joelson Wilson.​

Read any of the January financial pages and you will get the clear impression that internet sales are seriously rivalling the traditional retail sector. Sales through the internet at Christmas are said to have totalled £5bn. HMV and others are said to be feeling the pinch.

The effect on the high street may take a little time to filter through, but eventually we may reach a situation where certain types of shop, in locations where rents are pitched high and with upwards-only rent reviews, are going to experience reduced sales and thus pressure on rents. And if some retailers decide to copy Amazon and others, they will not need all their high street outlets.

Internet shopping is not suited to everything. You can't try on a shirt or a pair of shoes online. Your physical presence in a shop is still necessary for certain sales, but books, CDs, DVDs, cameras and many more items can easily be bought remotely. The other saving factor for the retail sector is the draw of the venue - people go to Bluewater or Metro Centre for a bout of "retail therapy". And supermarkets are probably relatively safe also.

You may wonder what this has got to do with licensed property. Pubs and restaurants are often located in major retail areas, such as high streets. Their leases are also usually subject to upwards-only rent reviews. If retailing does take a knock, there may be reduced pedestrian trade. Shops may cease to be viable and close and that will affect neighbouring premises. Although new traders may appear (IKEA is said to be looking at inner city sites) landlords may be obliged to let to lower quality tenants. If you have a long lease in such an area, your takings may drop, but your rent will not.

Malaise in the retail sector would eventually permeate through to rents for other users. Licensed property valuers usually tie rents to pub profits, so if both these and the general rental levels are haemorrhaging, pub rents ought to drop. This process could take several years to seep through however and in the meantime life in some premises could be a struggle.