Martin Flanagan: Inhospitable outlook for drinks sector

Martin Flanagan says the hospitality sector is facing 'attritional damage' rather than a 'perfect storm'. Picture: Ed Jones
Martin Flanagan says the hospitality sector is facing 'attritional damage' rather than a 'perfect storm'. Picture: Ed Jones
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Scotland’s pubs, clubs and small hotels are being squeezed between inexorably rising business rates and utility bills, particularly in rural areas where village pubs are a lifeblood for tourism.

And this is not just anecdotal apprehension. The latest empirical evidence comes from the Christmas/New Year review from the Scottish Licensed Trade Association (SLTA). That shows more than four out of ten pubs, clubs and small hotels saw a decline in trade at the end of 2016, while a little under one in three metaphorically only trod water.

READ MORE: Hospitality sector’s hangover adds to economic concerns

Roughly another third reported growth, but the overall picture, while far from dust and ashes, is also not buoyant, either. The SLTA, which compiles the report in conjunction with KPMG, is concerned that the significant slice of the hospitality sector that is seeing decline or stagnation does not bode well for either the industry or the wider tourism arena.

More shutters going up in the sector and job losses loom, the SLTA says. It says the issue has been exacerbated by Holyrood’s more stringent drink-drive limits than the rest of the UK since December 2014, and minimum wages initiatives.

This all falls short of any “perfect storm” for the drinks and hospitality industry, and there are points of resilience – craft beers and soft drinks, in particular. The concern is more of attritional damage being done to the sector that will compromise it incrementally and over time.

Pearson’s painful education

Pearson has blotted its copybook. Nearly a third has been slashed from the education group’s stock market value after ditching its profit and dividend forecasts. The problem is that the group’s problems look systemic rather than cyclical.

After quitting the media already with the sale of the Financial Times and Economist, and announcing yesterday that it is to sell its stake in the iconic Penguin publishing business, the company is even more irrevocably tied to the educational publishing market.

And all the evidence is that Generation Rent is turning to digital alternatives, or choosing to rent rather than buy print content. What price hapless Pearson boss John Fallow surviving the shock and bleak outlook for what was such a surefooted company.

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