Focus North East: View from the Top

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The marketplace has changed significantly in the North East due to recent major influences such as the smoking ban and the general depression in the...

The marketplace has changed significantly in the North East due to recent major influences such as the smoking ban and the general depression in the UK economy as a result of the credit crunch.

Traditional North East village and town community boozers in the region are seriously suffering as a result of these external factors. There is a notable increase in the amount of community pubs either up for lease or sale, or boarded up and closed for business. Statistics for the Tyne Tees region on-trade suggest a like-for-like decline in beer volumes of around 7.5 per cent - but our experience in the more deprived areas is that the decline is closer to 15 per cent.

The North East is historically a very competitively priced marketplace and the reduced overall footfall in the traditional wet-led outlet is further exacerbating the problem, with many pubs at war on price in an attempt to retain sales volumes. Prices of below £1.50 per pint are common in these areas.

Clearly, given the rising costs of rates, utilities, Sky TV etc, this pricing model is unsustainable. It's an endgame being played by many operators hoping it will be a case of survival of the fittest.

The key to success is to ensure we can adapt to these legislative changes as well as to people's ever-changing social and economic behaviours, including a much more family-oriented outlook on life. Pubs must diversify to provide a point of difference to meet these changing needs. Food, accommodation and entertainment-led pubs see a different picture, with little decline and even growth in numerous cases. Statistics for the North East following the smoking ban suggest food-led outlets are growing by around nine per cent.

Here at Camerons we have seen this success in our own estate with pubs such as the Ropery in Sunderland, a food-led outlet with live entertainment three nights a week that has become a popular venue. Wet sales in this pub have increased significantly due to the hard work the tenant has put into the business.

We also have a traditional English pub in the small village of Kirk Merrington, Co Durham, that has incorporated an authentic Cantonese restaurant and now attracts a new customer base as a destination outlet. This pub would not have survived on the remaining local business alone.

Another major challenge we face in the North East is sourcing and retaining quality operators. The doom-and-gloom outlook portrayed by many in the industry, coupled with the bad press given to pubcos over their apparent mistreatment of tenants, has put many people off the industry.

The next six months are key to ensuring we deliver the right local message to attract people by working alongside licensees to provide sustainable businesses.

There are certainly many challenges facing us over the next few years. But the local pub is an important part of the North East culture and if we can change and adapt to the customer's needs pubs will still form the backbone of the community in many villages, towns and cities.

Christopher Soley is general manager and director of Camerons Brewery in Hartlepool, which has an expanding estate of 66 tenanted pubs across the North of England

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