2010 challenge for pubs hotels and restuarants

At the end of the second week of 2010 we can look back on Christmas and look at predictions for the year.

Trade over Christmas seems to have been very patchy. Some independent real ale brewers have reported good trading figures, whereas other sectors have posted disappointing results. I cant help but think that the weather played a big part this year. Unless your customers were snowed in with you for days, like Englands highest pub the Tan Hill Inn in the Yorkshire Dales, or you were providing temporary safe refuge for stranded motorists, the odds were that your customers and your staff could not get to you.

The VAT hike at the beginning of the year has put upward pressure on the price of bear and food, and the trade will soon face the increase in business rates, likely to be an average of 11% even with transitional relief. The price of a pint of beer is predicted to rise by 40p by the end of the year. The impending election will be of little help, with the main parties falling over themselves to get tough on alcohol abuse, and the government is currently in a frenzy to introduce changes long overdue.

So what is there which is positive for the trade? Well of course we have the World Cup this summer, and that should help pubs have a good summer whatever the weather. But the first 6 months of the year will be very difficult for everyone. There will be no miraculous recovery in the housing market, and unemployment will continue to rise. Whatever government is elected we are bound to see a raid on our pockets to shore up the woefull public finances. This means that we will all have less diposable income.

The strong cry for minimum pricing on alcohol, which will hit supermarkets, is still a long way off and may not have the impact that many wish. Hopefully pubs will benefit , but unless traditional pubs see a resurgence in support they will continue to close at the present rate of 52 per week.

What this all adds up to is tough competition for all those competing for our leisure money. The winners will be those outlets offering a good atmosphere, good service, and value for money. Tired pubs and restaurants with indifferent food and indifferent staff will go to the wall. Wet led pubs will face a really tough challenge. Customers are more spohisticated in their needs, and a good pint of real ale may not be a sufficient draw.

The good news is that we all need to escape the gloom and doom and pressures of life, and a visit to a pub or restuarant, or a stay in a hotel, will be just what we need to recharge our batteries and maintain our sanity. So there will be a constant demand. The challenge for the trade will be to identify the demand and meet it to the customers' satisfaction.

Nigel Musgrove

Licensing Law Specialist