Cutting out dead wood

As trade nosedives in many pubs, tenant support and how to provide it is increasingly and urgently the issue of the day at pubco HQs across the land. No one wants to reduce rents unless they really have to - and maybe not even then. So trying to help struggling licensees comes first.

What form this help takes will obviously differ from pub to pub: after all, it's one of the great truths of the trade that every pub is unique. And we also know that a dog of a pub can become a Cruft's champion with the right investment.

But what will also determine the help each pubco offers is whether the licensee is someone that the pubco believes is deserving of help.

In many cases, the pubco will decide that a particular struggling licensee is just not good enough to deserve support. And they'll let him go to the wall and hope either to get in someone better, or sell off the pub for alternative use.

The question then becomes, has the pubco made the right judgement call? Is that really a useless licensee, or is this a licensee who's been badly advised, given a raw deal and been totally neglected by the BDM? Given the judgement call is being most likely made by the BDM, a bad BDM could well be making the wrong call. And we don't need to re-read the famous TISC report to know there are some dire BDMs out there.

On the other hand, some licensees just can't cut the mustard these days. They're not business people, they ignore free training courses and they never set foot outside their pub to look at it with customers' eyes, or see what the massed ranks of leisure competitors are up to. These are often the so-called "lifestyle licensees", and they make up a far larger proportion of many estates than is comfortable for their landlords.

Hard-nosed though it may be, some pubcos will be looking at the economic storms we're on the point of entering and seeing it as a once-in-a-lifetime opportunity to sort out the wheat from the chaff. They'll be calculatedly analysing just how over pubbed that part of their estate is, and what sort of presence they want there.

So pub closures will go on happening over the next few years. We may be on the verge of losing 10,000 or so pubs. Would consumers notice? And if they realised there were fewer than there used to be, chances are they'd also notice the ones left were of a uniformly higher standard.

The iron law of supply and demand is bearing down hard on the world of licensees.