Food and Beverage

Why Are So Many Pubs Closing?

A complex question.

Industry changes such as breweries having to sell their retail outlets to pub companies has changed the business model and probably led to a great cost burden and restriction upon lease holders to react to local customer demand.

Today’s consumers are economically hard pressed. Job uncertainty rising living costs combined with declining income leads to decreasing discretionary spend. Customers today wishing to treat themselves choose to go to the supermarket for beverages and ready chilled meals rather than a night out at the pub. Of course there are social events which cannot be held at home and potential customers will go out.

So what should the publican do?

We should look back to the 1930’s customers then as to now wanted to go out, to escape the economic worry, the media doom gloom if only for a few hours. Historically pubs were a cheap escape from the everyday world no longer is this the case. Today’s pubs are simply not offering a product service to match customer budgets. Customers want to let their hair down and just have a good time without incurring debt.

Why is there such a mismatch – a very good question? Many pub companies want to deliver a branded experience the corporate mind set thinks customers do not seek variety, they believe customers want to know the type of experience they are going to get before the step through the door. Such a strategy demands a formulaic ridged implementation of decor and corporate rules. Pub managers and staff are discouraged from independent thinking and more often than penalised if they do.  

A question has to be asked, why do, celebrity chefs’ and food journalists bang on about local fresh ingredients. Their rhetoric is always about localism.

Do they have a point and does the customer base want a local product service?

Economists increasing talk about mass manufacturing as being something of the past which probably partly explains the decline of UK manufacturing. Apparently mass manufacturing is switching to mass customisation manufacturing and this is happening right now. Why, people are individuals not cyborgs. There is an appropriate saying ‘variety is the spice of life.’

Culturally pubs have a place in the market however if pubs are to survival and be profitable they must fit local demand they shouldn’t offer the same regimental product service experience nationally. Of course people want good product service experience but they also seek diversity at a price they can afford. This means pub owners, managers must embed themselves in their local community and culture. Publicans must have the freedom to offer what customers value in their trading environment.

Easy to say, the challenging is to delivery.

Essentially don’t believe what politicians tell you economic growth is a long way off the new economic norm is economic stagnation. The good news more millionaires are created in hard economic times than in good what’s required is local independent entrepreneurial endeavour not a top down corporate management ethos.

Tigers head Analysis

Christopher Bird Author

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