Publicans should be wary of industry forecasts, good or bad

30-May-2012 - Last updated on 31-May-2012 at 15:07 GMT

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Willock: "The trouble with any sort of forecasting is that it is right too often for us to ignore it and wrong too often for us to rely on it."

As one wag once said: “Forecasting is very difficult, especially if it is about the future.” Indeed, if yesterday was a dependable indicator of tomorrow, stocks and shares would be an entirely safe and predictable haven.

Economic projections, election forecasts and sporting predictions are also all notoriously hard to pick. Eggs are always breaking on pundits’ faces. Who’d have thought, for example, that in the football season just gone Crystal Palace would beat Manchester United in the quarter finals of the Carling Cup at Old Trafford (I’ve been trying to get that into a leader column for six months!)?

The trouble with any sort of forecasting is that it is right too often for us to ignore it and wrong too often for us to rely on it. So how should we respond to prognoses of two important trends that will dictate the medium-term success of the pub trade?

CGA Strategy has shared with the PMA its forecasts for on-trade beer sales and on-trade outlet closures. The trade market intelligence firm revealed in its presentation to our MA250 conference last week that it has plotted the figures and pinpointed the moment when declines in both beer sales and pub/bar numbers will level off and return to growth.

According to the CGA graph we have reproduced on p5, that moment will come in five years’ time. Sadly, until that fateful day — let’s call it ‘B-Day’ — beer-volume sales will shrink by a further 7.1% and the number of on-trade outlets will drop by a further 5.1%. But then, according to CGA, we will “return to growth”.

So that’s it. The nadir of the on-trade will be 2017, after which pubs and bars will enjoy a post-recessionary resurgence. Or at least a dead-cat bounce.

But of course, this is just a forecast. Many variables — some predictable and some not — will be at play on the market between now and then. We might win a tax reprieve on VAT and/or beer duty. The country might emerge from this double-dip recession more quickly than expected (or Greece might bring the whole economic Jenga tower crashing down).

And this ‘Summer of Our Lives’ — with the triple-whammy of the Diamond Jubilee, Olympics and Euros — might just reignite this country’s love affair with its pubs and its beer and accelerate the recovery.

Good weather would help — as evidenced by record-low takings for pubs during April and record-high takings last weekend. But we’re operating in Britain, not Florida — so don’t plan to rely upon it. At the time of writing (on Monday), the Evening Standard was reporting that the country “will enjoy one more day of sunshine before storm clouds gather ahead of the Jubilee weekend”.

But that’s also just a forecast. And as Michael Fish and countless other weather-presenters have found out, you wouldn’t stake your professional reputation on it.