Pubs still struggling but there is hope with dedicated pub funding.
It doesn't come as a surprise to many that pubs are declining and have been doing so for the past few years. The culprit? Eye-watering business rates. On average, 25 pubs a week in the UK have closed or converted for other purposes. The average business rate bill for a pub has increased by 5% with many blaming the government for their lack of support and non-existent tax breaks for pubs. With technology and consumer habits changing, pubs are being left behind.
1,292 pubs closed last year due to crippling business rates.
Rising business rates paired with VAT and one of the highest rates of beer duty across Europe means landlords are hit with a triple whammy tax burden. Not something you want when customers numbers are dwindling dramatically.
Customers habits are also changing. Believe it or not, people are drinking less. They are also drinking differently. No longer is your average pint good enough. The digital revolution has meant customers want to try new and exciting drinks. Our need for instant gratification and split-second attention span means consumers get bored quickly and want the next best thing. New drinking trends have introduced craft beers, flavoured gins, low-calorie prosecco, complicated cocktails or purchasing their alcohol for a discounted price at the supermarket. All a recipe for disaster for the humble, local pub. It’s a struggle to keep up.
Landlords are counting on a Brexit deal to help tide them over for the next few years. Many have supported having a lower rate of duty for beer sold in pubs or charging a lower rate of VAT for pubs to help get them out the red and into the black. Alternatively, rates could be frozen to help landlords get back on their feet. This would radically change the business rates system but would be welcomed with open arms by the pub community. On the flip side, there has been an increase in pub sales due to the 2018 World Cup and fantastic summer weather. This lead to many pub gardens being full over the summer months. So there is hope - the trick is sustainability.
Pubs are still the heart of the community and as such we at Capalona offer pub landlords, owners and restaurants the help and funding they need to grow and prosper. For more information apply today and see how we can help your business grow.