Tough decisions could see pub sector go either way

Happy New Year to y'all, but not everyone is in a cheery mood. For according to the TUC 2011 is going to be 'horrible'.

A killer combination of job cuts and taxes rises will contribute to a fall in living standards and spending power, the UK's umbrella organisation for the trade union movement argues, somewhat predictably, you might suggest.

Its downbeat tone naturally contrasts with the government's view that without taking the tough decisions now the country's financial predicament will never improve. Indeed if anything it could get worse.

So where does this leave the pub sector? There's no escaping the harsh reality that less well-off punters will be even more hard-pressed in the coming 12 months. On paper this could see more local community pubs suffer. And perhaps shut for good.

Meanwhile, for as long as the interest rate environment remains benign there should be at least a static level of continued spending by those with mortgages in employment. In theory, invested, well-run pubs can attract these people, with their desire for a good time and, crucially, cash to spend. I stress, in theory.

But fears for the future will pervade even here and good operators will need to be mindful of what customers want, namely a decent experience at the right price.

Operators will fail, sadly, and some currently large companies will be not so large come December. Or could be gone altogether. The last few years have seen large groups contract, as debt and falling demand have taken their toll, while smaller, nimbler companies - the large groups of tomorrow? - have availed themselves of niche market conditions.

I'm often enlightened as to the challenges facing some operators, but last year I was encouraged by the sort of progress being made by smart entrepreneurial types who'd identified a market to go for and had succeeded.

I hope there will be more such activity in 2011…