Thursday, November 22, 2007

Reaching the tipping point?

Some time ago, I questioned whether the giant pub companies really constituted a viable long-term business model. So far, they have proved surprisingly resilient, but now we have a growing recession in the pub trade, there are plenty of signs that the wheel is coming off the cart. The author of this article certainly believes the tipping point is fast approaching.

I know that locally there are a number of pub company owned pubs that have been closed for weeks running into months, with “To Let” signs prominently displayed. I wouldn’t have said any of them were unviable, but that state of affairs must indicate severe difficulty in finding new tenants to pay over-optimistic rents. And, the longer a pub is shut, the more of its customers leach away elsewhere or take to drinking at home. It is notable how you never see pubs belonging to family breweries or small pub companies closed for any length of time.