One in three pubs fail to break even

Over a third of pubs in the UK have failed to break even after their first month of reopening, the British Beer and Pub Association has reported.

The latest data comes from a survey of its members that was conducted exactly a month after pubs were allowed to reopen on 4 July. 

While 37% of pubs failed to break even, a further 25% of brewing and pub sector businesses said they “didn’t feel their business was sustainable” beyond the end of March 2021.

The BBPA warned that following the implementation of safety measures, such as enforced distancing, table service, seating only, and one way systems, pubs now have less capacity to serve customers. 

In addition, it noted that consumer confidence for many customers to visit pubs was still returning. According to the BBPA, this is “impacting the viability of reopened pubs”. 

While the BBPA has welcomed certain government initiatives, such as the Eat Out To Help Out scheme and VAT reduction, it warns that further support is still needed for the pub and brewing sector in the medium and longer term to enable a full recovery. 

It is now urging the government to “play its part” in helping rebuild public confidence to go and visit pubs and other hospitality businesses. It added that community pubs needed extra support, as they are less likely to benefit from VAT cuts to food and the Eat Out to Help Out scheme if they sell only drinks and small food items.

It is also calling on the government to cut beer duty by 25%, cut VAT on beer served in pubs and “fundamentally reform business rates” to enable the beer and pub sector to fully recover.

Emma McClarkin, CEO of the BBPA, said: “One month after they were able to reopen in England, over a third of pubs are struggling to break even or turn a profit. This is inevitably due to lower consumer confidence and reduced capacity for pubs.

“£1 in every £3 spent in a pub goes to the taxman and now is the time to reinvest that money in our brewers and pubs. That means cutting beer duty by 25%, as well as making the VAT cut permanent and extending it to beer in pubs to bring the cost of a pint down and unlock investment. Fundamental reform is also needed of the business rates system – pubs pay 2.8% of the business rates bill, despite accounting for just 0.5% of turnover.”

She added: “Crucially, the Government must play a leading role in building public confidence to go out and visit pubs again, by delivering consistent and positive messages about their reopening.

“Our sector is a resilient one, and 75% of brewing and pub businesses say they are sustainable at present, but that still leaves 25% that are struggling and it would be catastrophic for our culture and economy if they are denied the support they need.”