Is the pub industry having a renaissance?

Despite last year’s Champions League final having a hotly-contested local derby on the cards with Real Madrid taking on Atletico Madrid, pubs bemoaned the lack of interest from UK customers. 

Data from payment processing company Worldpay looked into point of sale transactions in pubs and bars across the UK last year, and found that card payments were down five per cent compared to a usual Saturday evening. With 2015’s final nearly here, and Barcelona and Juventus set to slug it out – the prospects don’t look good this time round either.

The lack of English teams making the latter stages has been pointed to a reason for decreasing interest and punters staying home. Despite Arsenal playing in the group stages of Europe’s top competition for 17 seasons on the trot, it has made a habit of dropping out in the last 16. Chelsea won the competition in 2012, but there hasn’t been an English team near the final since, even though the Premier League is financially leading the way across Europe.

The decision to move the final from a Wednesday to a Saturday was also a factor. Thomas Gloyne of the Broker Freehouse in Leigh on Sea, said: “Moving the final to a Saturday when we tend to get a good crowd in anyway has meant we miss out on extra revenue during the week, without seeing any real difference in trading on the Saturday.”

Dave Hobday, UK managing director of Worldpay, suggested rugby at least looks to have a better chance of drawing in customers, with the World Cup in September. “One look at the Barcelona team-sheet suggests it might be a couple of years before we see another English team challenging,” he said before offering brighter prospects. “It might be premature to stop paying the TV license just yet, with the Rugby World Cup offering an opportunity for pubs showing live games to cash in.”

Card transactions in pubs during England’s 2014 match against Scotland were up 16 per cent compared to an average Saturday, which Worldpay said was one of the most profitable sporting weekends for the sector.

So, it’s not all doom and gloom. Other very encouraging signs for the pub industry – so often condemned to imminent extinction by reports of numerous closures – are recent stats from Barclays showing pub growth, which is being fuelled by young landlords.

Some 42 per cent of pub businesses were established in the last three years and the number of owners aged 25-34 has risen by a quarter since 2012.

Barclays said this new research indicated that the rise in turnover – up by an average of 23 per cent – and the injection of new owners were encouraging signs.

Adam Rowse, head of business banking, said: “It’s been long-reported that this is an industry met by challenges for pub owners, however our research shows that this has not deterred the next generation of ‘pub innovators’ from setting up shop.”

He added that there were also “a large number of establishments that have managed to sustain and grow their business in the last decade”. Rowse pointed to those that have “renewed their business plans in response to changing customer appetites – the rise in those catering with pub food for example has enabled diversification”.

Another figure of note recorded by Barclay’s research was that over one in five pubs are owned solely by a female landlady and over half have at least one female owner.

Sofia Mitrofan is one of these – manning The Chequers in Barley, Hertfordshire – which she described as a “cultural and social hub for the village”. When she first arrived, the pub was owned by a big chain company and, was quite simply, “slowly dying”, as Mitrofan put it. Where others might have seen a has-been destined to desertion, she saw potential.

“I knew if we could make it a free house, the pub could be successful. And it happened,” she said. In a display of community spirit, a few locals bought the pub and offered Mitrofan and her husband a long-term lease. Mitrofan said while this was an incredible gesture, it added an extra pressure for her to succeed – “It wasn’t just a lease they gave us, but their trust”.

The move into the pub industry followed time spent in London managing a hotel, and Mitrofan soon saw different sets of expectations. “From day one, we dedicated ourselves entirely to it and we slowly realised that if you build up a business for your locals, if you have a community involvement in place, then you stand a chance to succeed.”

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When the topic of young landlords came up Mitrofan was quick to praise the rise, suggesting their energy and drive will be a huge plus for the industry. “Young people often push their own limits in order to achieve their goals,” she explained.

Mitrofan also said the team element can be a factor in a pub’s success, so the varied front of having a landlord and landlady can be a boost. “Customers don’t want to see just one manager – they want to see a team. They don’t come to dine and drink in a five star restaurant – they are in the pub to socialise with friends and they treat us as part of their families.”

As Rowse mentioned, diversifying has paid off for Mitrofan. While they plan to keep the old traditional English aspect of the business there’s also an ongoing intention for The Chequers to “dare to be different” by offering Italian food. Her future plans are to reinvest all the capital back into the pub for at least the next couple of years.

Matt Hiscox is another landlord who found that listening to changes in consumer demand considerably paid off. The owner of the Carpenters Arms in Pontypool, Wales, said: “Years previously, turnover would be approximately 75 per cent in drink sales, but today – and for the past four to five years – the same proportion of turnover has shifted to food sales.”

To adapt to this, the pub’s expansion was helped by a business loan. “We’ve noticed a great improvement as a direct result of the investment, made possible through funding from Barclays,” he explained. “The loan has also helped my work-life balance since I can now support more staff.” The investment has double turnover, with double the number of employees too.

Hiscox started a career in engineering following direction from his school, but soon decided he’d prefer to do something for himself. He decided a landlord would be the best and most interesting option. While many of his friends stayed in professions like engineering and make decent money, “none of them really enjoy it as much as I love my job”.

There’s a common thread that seems to run through these pub owners, both the stalwarts and the up-and-coming – as well as dedication and commitment. Hiscox pointed to the “attraction of being your own boss”. He recalled his first boss twenty years ago was a landlady who was “epically hard-working”, and his focus to develop the Carpenters Arms has seen a similar level of drive needed.

When pondering why there has been something of a pub renaissance, Hiscox returned to the independence aspect – we’ve heard much about increasing interest in entrepreneurialism as an alternative to routine career options from students and those in work alike – and it seems this has extended to the pub industry. As Hiscox put it – “male or female, many people do just want to be in charge”. 

Image: Shutterstock

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