Time at the bar: Why pubs are facing their most crucial festive period in years

The Beer and Pub Association warns cost pressures could lead to closure of 750 pubs in the first half of 2024

A bar worker pours a pint of lager at a pub in central London in November 2023 (AFP via Getty Images)

It has been a far from festive few years for Britain’s beleaguered pubs as they have faced a moribund economy while still dealing with the long-term effects of Covid.

Publicans were hit hard by lockdown in 2020, and in 2021 restrictions were still in place as a new variant spread throughout the country, leading to further restrictions on celebrations.

Combined with soaring interest rates, the cost of living crisis, high inflation and eye-watering energy prices, the industry has been left reeling and desperate for decent trade in what is referred to as the “golden quarter” by industry executives.

The myriad of pressures has led to a stark increase in pub closures. According to real estate analysts Altus Group, 383 pubs shut in the first six months of the year - nearly matching the total for the whole of 2022.

The Beer and Pub Association has warned that energy bills - which are 300 per cent higher than pre-pandemic levels - and other tax pressures could lead to the loss of further 750 pubs in the first half of 2024. There were 45,800 pubs registered in the UK in 2023.

Ben William, owner of The George & Dragon in Much Wenlock, in Shropshire, told The Independent just before Christmas his pub has had a small uptick in business but it wasn’t as bustling as they hoped, with party bookings down on last year.

Punters have returned to pubs post-Covid but many are still struggling (AFP via Getty Images)

He has been the landlord for three years and said the most significant pressures have been rising costs putting pressures in margins and difficulties getting staff, in particular getting chefs.

His utilities exploded in price as his weekly bills shot up from £150 per week to £600 per week at the peak of the energy crisis in 2022, and food costs have also risen.

Mr William said: “Our reaction to that was we had to change how we operated, so a lot of our equipment is required to be on 24/7 such as the cellar cooler, the fridges, ice machines, all those sorts of things. So we then had to change the hours we operated, so there were nights we closed early, which means we lost other sales.”

He added that the pressure of utilities and further costs that pubs will face in the New Year could force further closures.

“There is going to be a lot of pubs, and other heavy utilities users, that are going to be closing in January,” he said. “They are not announcing it yet because they don’t want to put off the Christmas trade... It won’t just be the energy costs but people will start to think about April next year and the minimum wage increase.”

Jo Diskin, owner of Robin Hood in Stoke-on-Trent, said pub trade has not been anywhere near as strong as last year and that something positive needed to change in the sector.

“At this point we’re just keeping our fingers crossed and hoping for the best,” she said. “We have fundraisers and parties booked in January and February. But have had very few bookings through the Christmas period compared to last year. If trade drops any more a lot more pubs will close, so something needs to change.”

The festive season is a busy time behind the bar but some venues have seen a drop in bookings (PA)

The struggles pubs have faced are replicated in other hospitality businesses such as restaurants and cafes. Figures released by UKHospitality showed that the number of licensed premises in the UK has dropped below 100,000 for the first time ever. The largest losses have been drink-led pubs, bars and nightclubs, which have seen a net decline of 43.6 per cent over the period.

Small business insurer Simply Business revealed that over half, 54 per cent, of small and medium sized business owners will have to close, put plans on hold or be forced to find other employment if they don’t have a successful festive trading period this year.

CAMRA chief executive Tim Stainer, told The Independent they were extremely concerned about the high levels of pub closures and that Britain has the lowest number of pubs in UK history.

He said: “In terms of the factors impacting pubs, even pre-Covid pubs were facing quite a difficult time in terms of the cost of doing business but also the big gulf that customers were seeing for supermarket alcohol compared to what they have to pay for a pint in a pub. And that is through no fault of licensees, it’s down to a number of other factors of which they can’t control.

“When we went into Covid in not an ideal business situation, pubs were massively impacted by the lockdowns and burnt through any reserves or savings they had and also ended up with a lot of deferred debt...

“Some far-sighted pub companies forgave rent during the lockdown period but some just deferred it. So pubs came out of Covid in a very precarious financial situation and then had to go back to face the same factors they were struggling with before Covid which was rising taxation and business rates.”

Mr Stainer added that another factor impacting people is that habits have changed since the pandemic and that due to the cost of living crisis people are looking to save money.

Pubs are facing the cost of soaring energy bills and a public less able to spend

He added: “You can’t criticise people for looking at the little bit of money they’ve got to spend on leisure and enjoyment and thinking, well actually with that amount of money I can have several nights of watching Netflix and getting some beers delivered and a pizza, or I can spend all of that on a night out, because you have to spend £5 or £6 on a pint of beer nowadays.

“And it’s really important to stress that price point on a pint of beer is not licensees making a huge amount of profit, they don’t want to charge more than they have to. But the only option they have, other than absorbing all the increases in their costs of doing business, has to go to consumers now.

He added: “I think the worrying thing is we are not just talking about pubs that were already really struggling. In some cases you are talking about pubs that pre-Covid, pre-cost of living, were incredibly strong, good businesses providing a brilliant community hub for their local customers. And just all the increases on top of each other just erode any margins they’ve got.

“It’s left a lot of pubs very close to the edge or below the level of viability and a lot of them are continuing as long as they can but I’ve heard anecdotally from others in the industry that they’ve talked to many licensees saying they will probably try to get through Christmas and get through the Christmas rush and get more money in the bank and then give the keys back.”