The pub industry is experiencing a challenging period of declining demand and rising costs. This is having a damaging effect on a sector that was already reeling from the effects of increased competition. Even the best-respected managed businesses have to work hard to tread water, while many tenanted and leased pubs, particularly those that are wet-led, are struggling to survive. However, it is also true to say that the market is oversupplied in terms of numbers of outlets and a prolonged period of closures may well serve to bring about a long-overdue realignment that will actually be to the benefit of the pub businesses that remain.

In response to declining demand, many pubs have substantially increased and enhanced their food offers, as well as the range of alcoholic drinks they sell other than beer, plus increased their focus on soft drinks and hot beverages. However, a visit to the pub is not just about product, it is about atmosphere and research for this report has shown the demand for traditional and local pubs – the very venues that are experiencing the most rapid rate of closures. As such, although consumers say they want these venues, in reality they are not being used enough to be viable business models.

Going forward therefore there is likely to be, or at least needs to be, a re-injection of the traditional pub character and personality in modern-day public houses so that consumers’ demands of quality are balanced by their desire for personable venues. Small steps are already being made in this direction which also look to counteract other long-term trends within the market: for example, some within the trade are trying to re-establish the idea of calling into the pub for a pint on the way home from work to unwind as a way of keeping consumers’ frequency of visiting up even if they don’t have the time or money to stay for too long.

This report assesses the current status of the industry and considers the hypothesis: “Has the smoking ban attracted new customers or alienated pub regulars? Or is the credit crunch a much more pressing concern?”

Main report themes:

How are pubs compensating for lost revenue from smokers?

How is government legislation impacting on the industry?

Is the tied tenancy a sound and fair business model for the 21st Century?

How can pubs encourage people onto their premises and out of their homes?