151% more pubs go bust over Christmas

The number of pubs going bust in the fourth quarter of 2008 rose a massive 151% on last year as the economic downturn hit and people began to stay at home.

Research from Pricewaterhouse Coopers LLP (PwC) revealed that insolvencies had increased by 64% on the year as a whole. A total of 74 pubs went under in the fourth quarter — a jump from 29 in the same period last year. PwC said it predicted that 4,000 pubs would close by 2010.

"With beer sales falling to a record low and almost 40 pubs closing a week, up from the previous average of 36, we are seeing this trend continue to gather speed," said PwC hospitality and leisure director Stephen Broome.

"The industry has been ravaged by a combination of negative factors over recent years, and the recession is likely to put further pressure on an already difficult trading environment. We expect our recent prediction of 4000 pub closures by 2010 to sadly remain on course."

However, there could be some good news as a recent PwC poll showed that consumers were less willing to reduce their pub visits and how much they spent when they are there. Top of the list for cutting expenditure were take-aways (14%) and eating out (11%).

Broome added: "Of course this sentiment may change as more consumers face job threats and experience a reduced income. But for those pubs that get it right, and there are many that do, there is still a loyal customer following to be enjoyed."

Broome said that pubs, which plan for the recession and implement a "back to basics" strategy have the best chance of survival. "Those who don't know enough about themselves or markets they serve will be inclined to take the path of least resistance, leading to defensive and piecemeal actions which will result in reduced service levels and disgruntled clients. Most damaging of all, these businesses risk losing out to their competitors."

Restaurants​

A total of 32% more restaurants went bust in 2008 than the previous year with 141 going under in the fourth quarter. Broome said the sector had been hit by eat at home deals such as the M&S dine in for £10 deal and the rise in cookery programmes. "In addition to a number of expected high-end restaurant failures, those mid-range restaurants that do not focus on either a value for money or a unique dining experience have been disappearing from our streets since last summer. This trend is likely to accelerate."