Huge rise in the number of pubs going bust

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An increasingly large number of pubs are going bust as landlords wrestle with a perfect storm of poor weather, England’s abysmal performance at Euro 2016, Brexit and the introduction of the National Living Wage, a report has claimed.

Figures from insolvency specialist Begbies Traynor show that the number of pubs and bars which were dissolved in the second quarter increased 53 per cent to 831.

The research also reveals that one in five pubs and bars faces “significant financial distress”, also up from last year.

Julie Palmer, partner at Begbies Traynor, said: “The knock-on effect of England and Wales’s exits from the Euros, and the damage to consumer confidence in light of the current economic and political uncertainty, means the UK’s pubs and bars face serious challenges ahead that could result in more business closures or failures over the coming months.”

Data from Barclaycard has already shown that consumers reined in their spending in pubs and restaurants towards the end of June. Such spending, which traditionally sees double-digit growth at the end of the month when many people get their pay packets, fell back by 0.44 per cent and 0.46 per cent respectively in the seven days starting on June 24.

To compound matters, some 60 per cent of consumers expect the general economic situation to worsen in the next 12 months, up from 46 per cent in June, according to a one-off GfK Consumer Confidence Barometer taken after the EU referendum.

Ms Palmer said: “The longer term impact of the introduction of the National Living Wage remains to be seen but, given the sector’s model of tight margins and low cost staff, many businesses are already struggling to cope with the increased costs.

“Given the current financial state of many of the UK’s pubs and bars, many could be forced to either cut staff to reduce costs or face falling into the red.”

Pub closures have eased in recent years from the record 50 or so a week which shut in England in 2009.

Better home entertainment, cheap supermarket alcohol, drink-drive laws, soaring land values and the smoking ban have been blamed for the decline of the local pub in the last 50 years as buildings are converted into restaurants or convenience stores, which requires no planning permission, while others are demolished to make way for houses and nursing homes.

Those pubs most at risk are often those originally built to serve the suburbs as vast council and private housing estates were developed after the First World War.

Experts say the buildings are often overlooked but claim they are an essential part of our common identity as local 20th century landmarks, triggering new interest in their preservation.

The Campaign for Real Ale last year estimated three pubs a week were closing in Yorkshire , adding that nationally two pubs a week were being transformed into small-scale supermarket convenience stores.

A recent movement to have pubs listed as Assets of Community Value was intended to reverse this trend.