Pub insolvencies down a third from worst period
Pub insolvency rates are down a third from the height of the recession but Government spending cuts and a slowdown in consumer spending could tip more businesses over the edge, a survey has warned.
According to research from consultancy firm PricewaterhouseCoopers (PwC), the insolvency rate in the pub sector peaked in the last quarter of 2009, when 88 pubs businesses failed.
The research, which examined pub companies rather than individual operators, found that the rate of insolvency dropped by 32% in the second quarter of 2010. However, it warned the level of failure was still "comparatively high", up nearly 10% compared with 2008.
David Chubb, a partner at PwC, said that while pub company insolvency rates had fallen, trading remained difficult.
"The insolvency stats do not fully illustrate the extent of the problems in the sector as much underlying restructuring activity continues. Even without entering insolvency, creditors may still experience pain," he said.
Meanwhile restaurant company insolvencies are up 30% compared with two years ago, with the second quarter of 2010 up 5% on the first three months of the year.
"While the propensity to dine out is still very much a part of UK culture, the pursuit of value for money by the consumer has led to even high-end restaurants in London laying on fixed menus and other offers usually seen in casual dining," Chubb said.
"Restaurants must use their customer data to analyse whether such offers are bringing new customers or whether their regulars, who would dine regardless, are just doing so and paying less."
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By Kerstin Kühn
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