Monday, November 12, 2012

The churn rate for pubco side of estates

The churn rate for pubco side of estates has always looked for around 10% of an estate to be closed at any point. You see the number of closed and on the market percentage is a health barometer for the pubco. It's a gauge of the success of the tension between rent review prices and beer supply prices doing what they are supposed to: keep lessees on the brink - a low percentage of closed pubs means too few business failures which means the whole the pubco operation is not sweating its assets enough which means its area managers aren't working hard enough squeezing their tenants for every brass farthing they earn - which means the pubco's not charging enough and the tenants are making too much money - which means the tenants' may have breathing space and some time to think about their conditions and business health and begin to start asking questions and then meddle around with the status quo.

IF the percentage of closures is too high (say over 15-17% of the estate) then alarm bells begin to ring and concessions are given out to keep the levels somewhere around the mark where the BBPA and pubco's can go to Select Committees and OFT evidence and say: look it's not in our interests to have a business model that fails our lessees (our hard working tenants, our customers who we respect so much) their health is our future - to combat all the ravages of the current economic climate and all the red tape and other burdens that YOU THE GOVERNMENT are putting on our lessees we are pouring £millions into keeping them going - which is affecting the health of our parent company and putting the future of British Pubs at threat. 

Please legislate on Beer Duty and Business Rates and Red Tape and VAT Breaks to give the future of our industry a chance.

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