Pub closures surge by 60% this year

13 April, 2023

A recent analysis by Altus Group found that pubs in England and Wales are being demolished or redeveloped at an increasing rate, with almost 60% more pubs closing for good during the first three months of 2023 than in the same period last year.

According to government data, over 150 pubs have disappeared from communities in England and Wales since the start of the year due to rising energy bills.

The data showed that the overall number of pubs in England and Wales, including those vacant and being offered to let, dropped to 39,634 at the end of the first quarter. In comparison, 39,787 pubs were recorded at the end of 2022. The number of pubs closing for good has accelerated to an average of 51 per month, compared to 32 per month in 2022. In total, 386 pubs were lost last year.

The British Beer & Pub Association (BBPA) has warned that with the end of the Energy Bill Relief Scheme, the average energy bill for a pub will rise by £18,400 a year starting this month. This means that the average pub will need to increase its turnover by at least 11% just to break even. This is likely to be particularly challenging with data suggesting that consumers are cutting back on eating and drinking out to cope with the cost of living crisis instead of spending more at pubs.

Chief executive of the BBPA, Emma Clarkin, said:

"Energy bills are decimating our sector, with extortionate costs wiping out profits and closing pubs at a faster rate than the pandemic. Pubs that were profitable and thriving before the energy crisis are being left with no option but to shut up shop. We have been raising the alarm for months that energy costs are posing an existential threat to pubs across the country and these figures are evidence of that.

It is essential that the government intervenes to ensure energy suppliers are offering the option of renegotiation to pubs locked into unmanageably high energy contracts. Make no mistake, the longer this goes on the more pubs will be lost forever in communities across the country, something must be done immediately to save them."

Alex Probyn, president of property tax at Altus Group, added:

"Pubs have seen their values for the business rates tax fall 17% overall and, with measures taken at last year's Autumn Statement, that will mean a tax saving of £5,500 for the average pub.

But that simply won't compensate for the energy support being lost, making plots even more attractive for alternative investment."

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