Tuesday, July 03, 2012

Pub sector 'appears to have stabilised' as operators look to boost revenue

How about re-balancing the key statements of the article to give a more accurate view of what's happening with this 'stabilisation'? The conclusion would be somewhat different:

"pub operators are looking to maximise returns from all aspects of operations"

"Substantial numbers of operators are having to service relatively high levels of debt."

“There will continue to be issues arising from poor loan-to-value ratios for operations using property for security and continued reliance on tied contracts with major brewers to increase cash flow and optimise costs,”

"Meanwhile, consumers are becoming “professional bargain and discount hunters” when eating out, with four in 10 now making their choice based on offers and discounts available,"


'As pub operators maximise returns from all aspects of operations" ... "the majority of UK pubs, in tied estates, must service their Freeholders' high levels of debt raised against dubious property valuations which have put the solvency of the national pub estate in question'.

'Pubco's and 'Family Brewers' operating the Tied lease model will continue to force upwards financial pressure on tenants in order to service their own unsustainable debts.'

'Meanwhile, thousands of Tied sole traders will see many regular customers lured away from them, attracted by increasingly aggressive price cutting of the large managed chain operations, often owned by their own Freeholders.'

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