“I personally believe pubs/bars have priced themselves out of business.”
When you spend a lot of time talking to people who like pubs, and are sympathetic to their situation, it’s startling to come across a statement like that.
And this from the same conversation:
“The key question is why can Wetherspoons sell beer at £2-3 a pint, and some pubs sell at £6? It’s not just about landlords’ rent.”
We spotted those on LinkedIn in comments from an accountancy firm MD on a post from an insolvency expert – so these are people who understand business and can do sums.
We can hear publicans groaning from here.
In the context of supply chain issues, rampaging inflation and staff shortages, let alone the long-term structural problems caused by the pubco model, how much control do most really have over the price of a pint?
That’s not to say, of course, that some people don’t do quite well running pubs. We find ourselves thinking of a businessman who owned several pubs in Cornwall and would turn up for inspection in a huge Range Rover with personalised plates, gold cufflinks flashing.
It’s perhaps no wonder his customers got the impression that running a pub might be a nice earner and occasionally grumbled about the price of a pint.
As one pub landlord said to us a few years ago, “Even if I did have a Ferrari, I wouldn’t let my customers see me driving it, know what I mean?”
In general, though, it is fair to say that by the time you’ve covered the very cost of selling a pint in most settings, your margins will be pretty slim.
That’s why so many pubs try to compensate with food, the margins on which might give them a little bit more for manoeuvre.
Well, that is, until food also started going up in price.
“It cost me £110 to take my wife and two 7-year-olds to the pub for tea on Friday. Who can afford to do that often?” asked another commenter in the LinkedIn chat above.
For a while, pub food had an advantage: because it was allowed – no, expected – to be heartier and less fancy, it could fill a gap in the middle.
A decade or so ago, a Sunday roast in a pub might cost, say, £8-10, and you’d expect to pay less than a tenner for fish and chips. In fact, researching this on Twitter, we found someone in 2012 expressing fury at having paid £13 for fish and chips in a pub.
Now… those prices have barely changed. Because (a) those prices are almost hard-wired in people’s brains; and (b) nobody has any money.
Unless you’re confident that you’ll be able to continue to attract well-off customers, and the rest can go hang, putting up prices is a bold move.
So, what’s gone? The publican’s margin.
It’s helpful in this context to give people running pubs chances to talk openly about the challenges they face.
Tom Kerridge’s BBC documentary series did a good job of highlighting the gap between drinkers’ ideas of a fair price and the reality of many pubs’ accounts.
Pieces like this, in which a pub landlady talks about impossible fuel bill increases, can also be a reality check.
Perhaps what we need is more publicans to be more open about how they work out the asking price of a pint, if they feel able to do so.
Yvan Seth, who works as a beer distributor, had a go at this back in 2014, including a snappy infographic.
We’d certainly be happy to share more information on this if anyone feels like sharing with us privately.