Pubs face bleak period after beer sales slump

Pub operators have been warned to expect a "dire" January after poor December trading left the sector feeling depressed on the back of three months of declining beer sales.

According to statistics compiled by the British Beer & Pub Association, the volume of beer sold in pubs fell 9.7% in November, following a 7.7% drop in October and an 8.2% decline in September.

One analyst said trade for pubs "did not kick off in terms of strong trade until 17 December", with the sales mix and margins fundamentally altered by the smoking ban. "Prospects are dire in January and smaller businesses will struggle the most," the analyst said. "The tenanted side is taking the heat the most."

However, the source indicated that managed pub group Barracuda, with 216 sites across the UK, had performed well, with sales up by 3% in December.

Another industry observer warned that a gap was developing between the performance of managed operators and tenanted pubs. He said some tenanted operators were "prepared to hand in their keys" after a poor Christmas and New Year as managed operators continued to outperform them.

Meanwhile, Mark Brumby, analyst at Blue Oar Securities, said that "Christmas happened" for pubs. "But it started late, fluttered a bit and finished early," he added. "Spend per head has fallen, with customers taking the house white option. The worry is that stingy behaviour may become fashionable, addictive and contagious."

David Humphreys, director at Friary Marketing and Consulting Group, confirmed that the eating-out market had slowed down. "There was a slow start to Christmas and this has carried through," he said. "The first quarter is going to be particularly difficult and it will depend on what happens to ease the pressure on consumers' disposable income."

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By Christopher Walton

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