The Evolution of the Pub Industry in an Ever-Changing Economy

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Cumbria-based catering equipment provider G&M Supplies Ltd today announced support and admiration for small businesses taking unique approaches towards tackling stagnation across the industry, pledging to continue to offer a value-for-money price match promise to all UK pubs.

Micropubs, pound pubs and tax equality day are perhaps three terms that meant little to the majority of those connected to the pub trade until as recently as twelve months ago – and are three perfect examples of how the licensed trade and hospitality industries continue to evolve amidst an unpredictable economic climate and increased competition from supermarkets, many of which are afforded generous tax breaks.

Whilst the concept of the micropub seems to have gained momentum over the past twelve months, its origins can be traced back to at least 2005, when publican Martin Hillier first opened the Butchers Arms in Herne, Kent. Fast-forward nearly a decade, and the micropub is now in vogue with customers and independently-minded business owners alike.

Keeping it real

The Micropub Association, founded by Mr Hillier, defines a micropub as “a small freehouse” which follows certain ethical codes, such as listening to customers, serving traditional ales and snacks, and promoting conversation.

There are currently about 75 micropubs (in various guises) across the UK, with the number expected to reach 100 by the end of 2014. Many eschew bar service in favour of a cafe-culture style “waiting on” method, where punters are served with beverages direct to their table.

The rise of the micropub has been attributed in part to former chain-pub stewards and landlords who have recognised the earning potential that running a small freehouse can bring – for example, smaller premises below a certain turnover need not pay VAT on sales, and those with a rateable value of less than £6,000 are not required to pay any business rates whatsoever – an attractive proposition for any small businessperson.

Cutting costs to captivate customers

Another relatively new phenomenon is the pound pub – a discount chain dedicated to bringing bargain booze to the masses. The idea is to keep prices low in order to compete with supermarkets and off-licences. At 99p for a half and £1.50 for a pint, the PoundPub brand is intent on getting customers back through the inn doors, as opposed to consuming shop-purchased alcohol at home.

Of course, the rise of the budget bar has had a knock-on effect across the entire industry, with a spokesperson for bar provisions and catering equipment provider G&M Supplies commenting: “for nearly three decades we’ve been suppliers of everything from glassware and optics to commercial catering equipment to the bar, restaurant and hospitality trades, so naturally we’ve witnessed the industry evolve over the years, and in many cases evolved with it too. The rise of the budget pub has led to increasing numbers of publicans looking to purchase quality equipment with lower overheads. We’ve seen an increase in the number of start-ups, many of which are micropubs, asking us about leasing options, too. In many respects, our low price model mirrors that of the pub industry as a whole – we’re constantly adapting our prices to give publicans a fair deal”.

A call to action

This week has witnessed the VAT Club staging Tax Equality Day – a campaign involving over 15,000 venues lowering prices on food and drink by 7.5% in order to highlight the effect a government VAT cut from 20% to 5% would have across the industry. Several high profile chain-pubs and thousands of independent businesses signed up for the event, which took place on Wednesday 24th September.

A bright future

When asked about the future of the pub trade, a spokesperson for G&M Supplies was optimistic: “Things are on the up for publicans and suppliers alike. The industry continues to evolve, and one thing remains predominately clear: there will always be a demand for places to eat, drink and engage in conversation, which is good news all round. Time will tell precisely how budget pubs, micropubs and government tax incentives shape the culture of Britain’s public houses, although the figures for all three on paper look promising, to say the least.”

G&M Supplies Ltd provides commercial catering machinery and associated supplies and sundries to the UK pub, restaurant, cafe and hospitality trades. For further information about G&M Supplies, please call 01946 693555 or visit www.gmsuppliesltd.co.uk