Tuesday, 21 October 2008

Pubs are closing, are we really that surprised?

I have always been bothered by the continual issue of pubs closing. For me this is a multifaceted problem. Clearly it is a sad day when any pub ends up closing, for whatever reason. Before we became owners of our own beverage dispensing retail outlet we lived in a small village where the small local was under threat. It closed when the brewery sold it into the free trade while the new owners refurbished. It was closed for so long we wondered if it would ever reopen. We had to walk over a mile to the next nearest place. Now we have got our own pub, we worry about making it viable and bringing in enough money to pay the overheads and maintain the building to the standards required by customers, health and safety, environmental health, the fire service etc. We do wonder if the effort required in making it viable is ever going to bring rewards and the worry can be enormous.

I also worry about the impact that the resistance to change of usage is having in a more subtle way. Although it is completely understandable that there is resistance to a pub being turned into some other use, it may just be causing unnecessary damage to the pub industry and more importantly the people who have decided to make it their livelihood. CAMRA's well meaning attempts to keep pubs open may be doing no more than prolonging the agony of an eventuality.

It is true that there are some success stories. CAMRA have helped to jolly along communities into supporting a dying pub and eventually finding a licensee who can turn around the fortunes of an establishment, but this is probably not the norm. It is more often than not the case that the resistance simply puts great stress on a pub owner and the surrounding community with the eventual result that the owner looses a significant part of the investment put in and looses faith in pubs as a way of earning a living. The industry looses any skills that the disillusioned had.

It is true that if there was no check on the closure of pubs then there is likely to be wholesale closures that would be significantly damaging, so I'm not suggesting that a fight is never appropriate. We do need to look at the overall effect of fighting lost causes.

A major argument for keeping a particular pub open is that all it needs is "the right management team". The thing is it takes an incredible type of person to run a pub well. It takes an even more incredible type of person, probably with an incredible partner, has a good financial collateral and lots and lots of energy to be able to turn a failing pub in to a fantastic pub. There simply are not the number of people in this country who have all these qualities to run all the faltering pubs that are out there.

It is often said that if a community pub closes it rips the heart out of the community. I think community pubs closing is a symptom of the heart having already gone from the community. In a previous post I mention about the lack of respect for pubs. This is often even more so in smaller communities. Often the community is so insular that it would not matter how much the average landlord tries he will never do enough. The beer will always be too expensive, the food will not be as good as the the food the landlord that was there two before him did, they will always remember the time that they were permitted to stay until 3am, throw up on the carpet, fight, shout and swear and every previous landlord just laughed at it all! Like hell!!

In my experience, even if we say it's OK to behave like this in a pub, many pubs are scaring away decent folk because of unacceptable behaviour of the "regulars". In many small communities an "incomer" will have a very tough job changing the ethos of a pub to one that will work. All pubs, community pubs and town pubs alike need to progress. In small insular communities this is extremely hard to achieve. For a community pub to work the community has to work in a positive way with the licensee and respect the tough job he has.

A common criticism leveled at the failing pub is that it is not open at the times that the customers would like it to be open. "How do they expect to make money if they are always closed!" is the cry. But very often the perception of the customer is biased towards their own needs rather than the viability of the pub. If the general community really thinks that most rural pubs will take enough money to justify being open on a wet Tuesday afternoon then they are mistaken. Besides, is a licensee not permitted to have a life outside the pub?

A common "answer" to the problem of keeping a pub viable is to try and diversify. Become a post office, shop, library etc. Well these ideas might work in some situations and great if they do. The problem with diversification is that it also results in complication for the operator. Put in simple terms: if you went to bed every night after 1am do you think you could get up and be cheerful to open the shop a 9am - I know I couldn't.

A further problem most publicans have is that of staffing. There simply are not enough quality people out there in the local rural community who are prepared to work the unsocial hours required. There might be people, but frankly, some that will do the work cannot be trusted to be behind a bar.

There is a rather sceptical view out there, that I believe is over hyped: it states that many of the pubs that are closing are being deliberately run down to ensure there is proof that they are not viable. The owner is doing this to make a major profit from the change of use. I believe in the vast majority of cases this is not true. Put simply, if a building is worth more as a house than it is as a pub then the pub is a very long way off being viable. Most pubs, in my view, should be worth significantly more than the base value of the building as a dwelling. Pubs often have significant investment in cellar equipment, kitchen equipment, specialist fixtures, fittings and furniture and there should be, from a business point of view some value in "good will".

It remains a fact that many pubs are worth a lot less than the building would be were it to be sold as a dwelling. This is not just an anomaly of the property market, it is a problem with the amount customers are prepared to pay for beer. The value of pubs in rural locations, has, for a number of years, been significantly less than dwellings.

The reason is simple, in economic terms most pubs in the rural locations, most "community pubs", cannot pay their way in a commercial sense. We are, I believe in the pub trade, going through the same pain that the coal miners went through in the late 70's and early 80's as they were forced into realising the situation that their industry, as it stood, was not viable.

We can fight it if we like, but rural pubs, where the population surround them is small, will fail. Trying to stop it will just put people through misery.

That does not equate, though, to the end of the pub. Not providing we are prepared to redefine the pub. If we accept that pubs might have to do something different. If we accept that the quality food destination pub (rather than gastro) is part of the the answer. If we accept that some pubs might do better without a pool table or juke box or swearing obnoxious locals, then we have a chance.

We have to accept, more than anything, that a local pub, serving a local community and visitors alike, might have more problems making it pay. Weatherspoons prices can only be charged in Weatherspoons, and so your community pubs need to charge more. Your village store charges more because it's right where you want it and you save on your petrol. We have not yet made that link.

Many people come into the trade using all their life's worth. Putting everything they own and more into the venture. Buying property should always, in the long term have a reasonable degree of security. This is rapidly turning out to not be the case with investments in pubs. The pub market is changing, preventing decent people from getting back what they have invested is going to make the pub industry even less attractive to ordinary people investing in it.

But more than anything, respect your pub and respect your licensee, he/she may not be the best but they might just be the best you are ever going to get.


Velky Al said...

Superbly written piece.

Tandleman said...

Good stuff. I like the miners analogy. I need to think about this a bit more, but today I'm off to visit the superb Huddersfield!

Jeff Pickthall said...

Spot on.

It's worth remembering that when chain operators decide to sell a poorly-performing pub they try their damndest to sell to a developer rather than a pub operator in order to reduce competition for their remaining estate.

The Woolpack Inn said...

Thanks guys, I appreciate that.

Tandleman I think we all need to think more carefully about all these issues. I believe it to be far more complicated than anybody understands - and of course I include me in "everybody".

Jeff, I have many thoughts on tied pubs, pubco's and the like, which should be coming to a blog near you soon.

Watch this space!