Pub failure rate on the increase

The pub sector's problems have been highlighted in new research which shows the failure rate in the sector is on the increase.

According to insolvency practitioners at PricewaterhouseCooper's (PwC), business collapses in the pub trade rose from 64 in the third quarter to 74 in the Christmas quarter, up 16 per cent.

Stephen Broome, PwC's hospitality & leisure director, said the pace of commercial failures was growing: "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.

"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 4,000 pub closures by 2010 to sadly remain on course."

However, a recent PwC consumer poll suggested people were less willing to reduce their visits to the pub or indeed how much they spend when they are there, and were instead cutting down on take-aways, fast food and eating out.

"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 added.

In the PwC poll, asking consumers what would be first choice if they were forced to cut spending, take-aways, fast food (14 per cent) and eating out (11 per cent) were top of the 'chopping list', while only half of respondees said they would reduce their grocery purchases.

PwC added that nearly a third more restaurants went bust in 2008 than in the previous year, as more UK consumers chose to eat in.