Pubs and places
On winter mornings my dog walk tends to follow a very urban pattern. It’s too dark for the woods and field, so myself and my dog (a rescued Boxer who loves a good walk) loop round the edge of the town centre and the harbour, before coming back to the house past the old colliery sidings. Sometimes we do the loop in the opposite direction and include the town’s best park, built on an old waste tip behind the harbour — we’re adventurous like that.
What’s that got to do with pubs? Lots, actually. We pass lots of them, or lots of what used to be pubs, on our journey. Being on the edge of the town centre means there’s even a Wetherspoons in the old cinema at the end of the street. That configuration, with a former colliery at one end of the street and a former cinema at the other, should tell anyone immediately that the street predates the Town and Country Planning reforms of the 1940s. There’s a belief of course that planning and development management started then; in fact, the very existence of my street, which was underwater until the 1870s, reflects that large landowners, even then, were willing to plan long for the long term, reclaiming land and building infrastructure to enable development. (The original conveyance for my house states that the occupier will buy their water supply from the landowners private reservoir, two or three miles away).
So, pubs. The first thing to notice round here is how many pubs have closed. Over there is the Joiners Arms, converted into a convenience store in about 2012, and dark again as the owners couldn’t make it pay. (There are a couple of those round here — someone should do some research into whether the failure of convenience stores, especially late entrants to the market, is a nationwide trend). Over there were the Kings Head and the Steam Packet, previously the Star and Garter. They were both large comfortable beer palaces by the harbour, with accommodation for guests upstairs. In later years the Kings Head had a nightclub as well, but now it’s being converted to a multiple of uses, including a cafe. The Steampacket is where the dog goes to see the vet nowadays.
Why does this matter? At work last week I got a circular from a research company rhetorically asking if the current lockdown would be the death of wet led pubs. I think that the lockdown may be the straw that broke the camel’s back for some wet led pubs, especially those where tenants have unsympathetic landlords. The trend away from pubs is clear — according to a House of Lords report “ In 2000 the volume of beer sold at off-licences was less than half that sold at on-licences. The proportion steadily increased until in 2014 the volume of beer bought at off-licences, the equivalent of 13.78 million barrels, for the first time exceeded the 13.66 million barrels sold in pubs, clubs and restaurants” It’s not just about the chances since 2000 however. I also think that the near terminal decline in wet led pubs is the logical conclusion of a process that began in the 50s and 60s.
I’m fascinated by the way that legislative interventions in a business like the licensing trade have combined with more commonplace processes of rationalization and business mergers to produce a situation where the ‘traditional’ wet led pub is likely to entirely vanish in the next two decades. As a place manager I’m intrigued by where that will lead at a time when there is already a surplus of available properties on our high streets.
What’s legislation got to do with it?
In 1964 a new Licensing Act was passed, to both consolidate and update the legislation that defined the pub trade. One of the features of the act was that it made it easier for license holders to apply to transfer licenses from an existing site to a new one in the same area. It accelerated a tendency for breweries to close small town and city centre outlets, and transfer their licenses to the new style of suburban and estate pubs, the same pubs which are closing in their droves as a result of shifts in customer behaviour and a failure to adapt or change .
The structure of the brewing and pub trade was changin at the same time as the legislation was changing in the sixties. The same forces that led to Britain’s car manufacturers amalgamating into a few large multinationals (and the organizational and financial shambles that was British Leyland) led to the patchwork quilt of regional brewers being replaced by a much neater picture of a few large brewers, publicly owned, whose directors were expected to maximize return on investment — to focus on the bottom line.The chance to replace a small town centre pub with a large suburban pub where you could charge 10% extra in the lounge for the same beer you were selling in the bar because the lounge had carpet and upholstered seats was too good to miss. The attractions of the lounge bar to women and other excluded groups driven away by the near toxic masculinity of the public bar, and the ability to use that space to drive sales of more profitable packaged drinks, was another new line of profits not possible in small high street pubs.
One of my insights about that process was that the closure of pubs may have provided a stock of cheap retail space in town centres, and diminished the diversity of the town centre. Place managers nowadays talk about the need to drive footfall by incorporating leisure and other activities on the high street — but if you go through the various lists of closed pubs that crop up on the internet it’s clear that pubs were part of the high street mix much more fifty years ago than they are now.
The same pressure to grow the bottom line in pubs led to an emphasis on food trade (or dry trade, in the jargon) over the wet trade. Want an example? When I worked in major chain pubs in the 80s and 90s the expectation was that the gross profit on dry sales would be above 60%, while the gross on wet sales would be 50%. There were more ways to drive profit on food than there were on wet sales, and there were more ways to adapt and innovate with menu changes or local specialities.
Brewing is an industrial process. If you don’t have a unique product or brand then volume is everything, and changes in scale can deliver a demonstrable return on investment. If you’re an industrial brewer sending 20,000 barrels of beer on an arctic to an Asda warehouse is much easier, logistically, than trying to sell 20,000 barrels via a chain of pubs. Long before the symptoms of change became obvious on the high street, the drivers of change were at work.
Why does this matter? If you care about high streets it matters hugely. If you just want to sell beer to people who will stand at the bar and swig it by the pint you need a lot less floor space than if you want to sell them a meal that they’ll sit down to eat. It’s why Wetherspoons specialize in distressed sites, often off the high street, that offer the floorspace their mix of wet and dry require. In turn Wetherspoons can buy beer in volumes that very few chains can match, and can tolerate lower margins on wet sales because of their high volumes of dry sales. My intuition is that a loss of wet led pubs may lead to more vacant redundant property on the high street, much of it with a small footprint so that it’s not immediately convertible to other hospitality uses or traditional shopfront retail.
Along with the wet led pub closures there’s a huge risk in the community sector to the future of members clubs, both as wet led drinking establishments, and as amateur sports clubs where the profits on drink sales subsidizes other activities. In many cases those clubs will need to restructure and find new income streams, or cease to exist.
If my basic premise is right, that the wet led pub trade is almost end of life except for specialist retailers of craft beers, as a result of forces that pre-date the pandemic, then place managers need to start thinking now about what those vacant high street premises get used for. It could be difficult times ahead.
