Nobody in this industry can be happy about Economies of Ale, the report released last month by the Office of National Statistics (ONS) that shows a quarter of British pubs have disappeared since 2008.
When faced with such grim reading, we have a choice. We could throw our hands up in the air and say: ‘We’re doomed!’ This is certainly the option preferred by the media: I’ve been dragged on to several radio shows over the past few weeks to discuss ‘the death of the pub’.
The other option would be to acknowledge that the ONS report is an authoritative piece of work that’s rich in data. If we take time to analyse it, we could learn something about why pubs are in such trouble. If we understand that, we’re in a better position to do something about it.
I’ve been working with one particular data set that splits the total number of pubs by year based on the number of people they employ and the size of the parent company that owns them.
You can look at how many pubs are independent, how many are owned by a company that operates between two and 249 sites, and how many are owned by companies that operate 250 or more sites. This means that we can compare the performance of pubco-owned pubs with independently owned pubs.
What the figures can’t do is differentiate between pubs that have closed their doors and pubs that have changed ownership – for example, we can’t track pubs that have been sold off by big pubcos to become independent, versus those that have been sold off for alternative use.
But we can make some guesses.
Big players’ disposals
Digging deeper into the data, we see some interesting trends. Before the 2008 crash, big pubcos got rid of almost all their small pubs (those that employ fewer than 10 people.) By 2008, they had less than a third as many small pubs as they did in 2001. By 2018, that number had shrunk to just 15% of its 2001 total.
By contrast, the number of independently owned pubs had increased by 2008. Multiple operators in total shed around 4,700 sites over this period, while the number of independently owned pubs increased by 2,500. Clearly then, a lot of pubco pubs became independent during this period, but a lot closed for good. When people accuse the pubcos of being the main cause of pub closures, if we’re talking about the first decade of this century, they are correct.
But since the 2008 financial crash, the picture is very different. Since 2008, big pubcos have performed better than smaller companies or independents. Since 2010, pubcos have actually increased the number of pubs they own. From 2008, the sector that has performed worse than any other is independently owned pubs, which have shrunk by just more than a quarter.
Smaller sites fared worse
There are a great many factors causing pub closures, and it’s tempting to simplify the issue. But one thing we can say with certainty is that since 2008, the pubco tie is not the only, nor even the main, cause of pub closures. Tied pubs are doing better than independents. It’s a fact.
More significant is the size of the pub. One of the headlines of the report is that small pubs have fared far worse than big ones. The authors were quick to point out that even though a quarter of pubs have gone, the number of people employed in pubs has increased and, adjusted for inflation, the total amount spent in pubs has remained constant. We may be going to pubs less, but we’re spending more when we get there.
These are headline figures. Could tied pubs be doing even better if the tie were fairer? Are some tied pubs closing because of the conditions of the tie, while independent pubs are closing because of their size (now the pubcos hardly own any smaller pubs)? Almost certainly.
I’m not writing this to defend the state of the pubco tie (though doubtless my social media feed will now accuse me of doing just that.) I’m saying that if you focus only on the tie, blaming it for all the ills of the pub, you’re blinding yourself to greater threats that are hitting tied and free-of-tie pubs alike. For anyone who truly wants to save the great British pub, it’s time to open your eyes.