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News Release

Bristol

“Glass half full” prediction for South West’s pub sector

Financing remains a concern but outlook for region is bright, says John Kinsey, Director at Jones Lang LaSalle


Bristol, 11th October 2011 - The South West is bucking a national trend which is seeing continued decline in the pubs sector, according to the region’s foremost leisure and pubs industry expert.
 
A new report from international property consultants Jones Lang LaSalle, formerly King Sturge in the South West, highlights how much the UK pub trade is suffering with up to 25 closures a week across the country.
 
It also reveals that traditional, non-food serving public houses – “wet” pubs as they are known in the trade – have seen a sharp 66 per cent fall in sales in the UK as a whole.
However, the firm’s leisure and pubs expert for the South West, John Kinsey, believes the region is proving to be more resilient than the rest of the country.
 
“Of course pubs aren’t the only sector of the economy to have suffered in recent years as people’s disposable income has reduced,” he said.
 
“But the added pressures of dealing with things such as the smoking ban and availability of massively discounted alcohol at supermarkets has, sadly, pushed many pubs to the brink and beyond.  
 
“But that said, we are still doing good business here in the South West facilitating many public house sales and I firmly believe the region’s pub trade is strong compared to the rest of the UK.
 
“We have to be realistic though and admit that there are still factors that are causing problems, such as the continued concerns over financing as there is still little appetite for banks to provide cash due to perceived risks. Loan-to-value ratios are typically at only 50 per cent, which is stifling further significant growth in the market somewhat.”
 
Mr Kinsey said the region’s public houses which also offered food continued to outperform their alcohol-only counterparts, and that this trend was likely to continue for at least the next 12 months.
 
“When you look at the national picture I’m afraid it is a rather gloomy outlook for the pub trade, but here in the South West I’m very much of the opinion that the glass if half full, rather than half empty, and that we will continue to see growth here.”
 
To compile its report Jones Lang LaSalle quizzed public house investors about the issues and problems they expected to dominate the UK pub industry over the next year.
 
The fall in disposable consumer income was cited as the main concern, by 34 per cent of respondents. This was followed by competition from “off sale trade” (the availability of discounted and cheap supermarket alcohol with people choosing to stay in and drink at home) at 25 per cent and the availability of finance (20 per cent).