Are rural pubs a dying breed?
On of the inherent characteristics of British society and culture which actually goes beyond the internal borders of the UK is the pub and what it subsequently means as a meeting place and focal point for social activities; in fact, for many small communities the pub is the only social meeting place. I must admit that I do not often go to pubs but there is something inherently likable about them; I can not pinpoint what it is but somehow pubs are just a good place to be. Surely, such an important and well-cited aspect of British culture are enduring and lingering as an integral part of the British society ... Perhaps we can not be so sure though
(Quotes are from the Guardian).
So, the general point is this:
'Many bars are worth more as property than businesses but some adapt and thrive.'
A lot of corporate activity is stirring up the market and delievering results but some are being lost in the process.
'A string of recent corporate deals between a new generation of pub barons has seen an unprecedented number of pubs change hands at ever higher prices. Many City analysts expect the property investor Robert Tchenguiz to raise the bar yet again after his £4.4bn offer for Britain's largest operator, Mitchells & Butlers, which includes the Harvester, O'Neills and Toby chains, was rejected last month.
But behind this corporate activity, trade in Britain's public houses has been slowly but steadily drying up, leaving a trail of boarded-up sites and housing conversions - not least among the nation's once-cherished village pubs.'
The rural pub is losing out here.
'Since then, a steady stream of pub, shop and post office closures has stripped neighbouring villages of many amenities - a story familiar across much of rural Britain. Despite rapid growth in the number of high-street bars clustered in urban drinking circuits, the total number of UK pubs has fallen by almost 5% in the past decade to 58,600, according to the Beer and Pub Association, with heaviest losses in rural areas. Beer and cider sales in pubs, meanwhile, have also been dropping (down 3.6% last year) hit by lifestyle changes and cheap supermarket multipacks drunk at home.'
Bringing the pub back as the hub - eager spirits (Prince Charles! :)) are taking up the fight.
'The Fighting Cocks is just one of 300 village pubs that have been helped by Pub is the Hub, an organisation started by Prince Charles and backed by his Prince's Trust charity. It was set up in 2001 and has helped hundreds of rural publicans diversify into just about every local service imaginable.
John Longden, co-founder of Pub is the Hub, says: "Very often changes can provide a remarkable transformation. You support the community and they come back and support you. You may not make any money in a new shop but if a pub takes a lead in maintaining a community spirit, people want to come back and support your many businesses at the bar."'
But the market still dictates preceedings. The usage of pub estates to borrow cheaply is the one to watch here.
'However, as times have grown tough, the market for pub assets remains in rude health.'
'The gulf between rising pub property valuations - up 8% last year - and a flat or declining trade across Britain's bars is largely down to financial wizardry. Private equity buyout groups have seen rich opportunities in borrowing very cheaply against property assets and steady future revenue streams from large pub estates. "The financing for freehold properties has become more efficient," says Punch's chief executive, Giles Thorley, who this week disposed of 290 pubs to the US private equity house GI Partners for £570m - "well in excess of what we expected".'
'As pressure to borrow against property and future cashflows continues, Mr Wellstead said he expected more hotly contested deals, particularly where larger managed pub groups with a strong food emphasis are up for the taking. At the other end of the market, however, capacity will continue to gradually reduce.'
This is definitely not the end for the pub which I think will endure for some time ahead but perhaps a trend which will prompt an essentially unwanted shake-out? I mean, the market is not always right is it?