Richard Bath: Last chance saloons | Pubs call time for good as recession keeps boozers at home

As pubs we need to do something special to get people to visit us: the world has changed and pubs have to face up to that or die

IT'S FRIDAY evening and The Royal Oak is quiet as a grave, but then it's slow every night at the moment. Over in the corner of this neat little wood-panelled pub in downtown Largs there are two retired couples chattering away over a couple of drams and a pair of half pints, but that's it. At the bar, behind which hang pint pots that belong to absent regulars, is Tony Riley. He's been the Oak's landlord for 20 years and he's never seen it this bad. "If I was a tenant and didn't have the freehold, I'd jack it in tomorrow," he says.

A smattering of other customers, so few you can count them on one hand, have come and gone throughout the day, but at eight o'clock on the busiest night of the week, Largs is dead. This time last year people flocked here from the nearby towns to drink and carouse in the seaside resort, but times have changed and not for the better. If the Royal Oak is almost empty, so are virtually all its competitors.

Hide Ad
Hide Ad

"In past years it was standing room only at this time of night on a Friday," says Riley. "Now it's so quiet and it's the same everywhere: there are 13 pubs in town and no sooner does one change hands than it closes again. It's not difficult to see why: the price of drink has gone up hugely but I'm still turning over less than I was five years ago. Running a pub is a hard life these days and there's no light at the end of the tunnel. In five years' time there'll be less pubs here. A lot less."

"We could end up like Paisley," chips in Sam Ewing, one of the retired foursome and a local who has seen the Royal Oak change from a popular boozer in a thriving small town into a marginal enterprise. "I was over there the other day and a whole load of very popular pubs, places like the Craigieburn and Kennedy's, have gone out of business.

"A guy I know up there says that his friends will get together, buy 24 cans for next to nothing in the supermarket and go and sit in someone's flat because they can smoke away to their hearts' content. Then they might go down to the pub for a late pint, but it's just as likely that they'll stay put. It's killing the pubs."

Recent figures show that a pub goes out of business every 48 hours in Scotland. Riley says that there's no question of him becoming one of those, and thank goodness for that. This is the kind of boozer you would hope always has a place in Scottish life: small, convivial, with a continual buzz of conversation but where you are left alone if you want. It's comfortable and the wood-panelled walls provide a natural warmth. The place is tidy but has a lived-in feel and intelligent conversation is easy to come by. It is, in short, exactly the sort of place in which to relax away from the grind of the world. But Riley is under no illusions: he knows of several local establishments not unlike his which he reckons could be converted into flats this time next year.

In the 18 months after the smoking ban came into force in March 2006 the number of pubs in Scotland, which stood at a little over 5,200, was reduced by 400. But the smoking ban is not the only problem. A tsunami of across-the-board cost increases has coincided with an icy wind of change in the form of cultural shift that sees growing numbers of Scots consume their bevvy at home. Now, with the perilous state of the economy taking its toll, a perfect storm is sinking many of the country's pubs.

If 2007, when pubs closed nine times faster than in 2006 and 18 times faster than in 2005, was bad, then 2008 was even worse, with closure rates up by 33% on 2007. For every pub that opened in 2008 another three closed, while beer sales fell by 10.6% compared to the previous year.

This year promises to be even worse. The recession has made cost the main determinant for alcohol sales, while the Licensing (Scotland) 2005 Act will be fully operational by the autumn and brings with it a whole new raft of burdens, including the need for professional drawings from architects and documentation from lawyers. But mainly it involves more money for essentially the same service: at least 10 times as much money, or in the case of The Royal Oak a hike in the cost of getting a licence equivalent to around 3,000%.

Factor in the anti-drink bill being proposed by the SNP – an assault on drinking culture per se, including minimum pricing for alcohol – and the result is likely to be last orders in many more pubs. Industry bodies estimate that up to 10% of the 150,000 jobs could be at risk.

Hide Ad
Hide Ad

"Things are not terribly good, and they've been made worse by the way the new licensing regime has been implemented," says Ramsay McGhee, who represents Inverness, the Highlands and the Islands for the Scottish Licensed Trade Association. "Highland pubs, small hotels and restaurants have seen the cost of their licence go up from 130 for three years to between 1,500 and 2,340. That will tip some pubs over the edge, while many restaurants are thinking about converting to BYO.

"It's an absolute disaster for a six-bedroom hotel that wants to serve drinks or wine to guests while for lots of the pubs who rely on coach parties it could be the end. At the moment coach parties come up on all-inclusive deals and have free bars, but under the new legislation they are trying to ban that as an irresponsible promotion when that law was designed to stop under-age and binge-drinkers not senior citizens on a coach trip."

The evidence of the past five years suggests that the loss of pubs will be most severe in rural areas where pubs also have a dual social function. McGhee cites the village of Avoch on the Black Isle which has doubled in size in the past 20 years and until recently had two pubs but could soon have none. Traditional male-dominated pubs which have historically been sustained by a high number of regulars will also be hit disproportionately hard says Patrick Browne, chief executive of the Scottish Beer and Pub Association.

"Pubs are being hit by changing social patterns but the licensing reform will also cost 40m this year," says Browne. "Pubs will try to broaden their appeal, to change their demographic beyond their regulars by, say, doing food. But in rural areas there may simply not be enough potential customers to be able to absorb the extra overheads, while in lots of traditional pubs there may not be a big enough footprint to open up a kitchen. Now the Government is about to insist on charging more to bring down alcohol consumption when it's already declining. We have some of the highest drink prices in the world and now we want to charge more."

Tony Riley's Royal Oak is typical of the pub that has nowhere to go. His footprint isn't big enough to start doing food, and he reckons he'd lose his regulars if he changed the pub radically in a search for new customers. He's also had to put up with a licence charge that has gone from 170 for three years to 3,000, and which necessitated many hundreds of pounds in legal and architectural fees. "I just wish those bastards in Edinburgh had some idea of how hard it is for small businesses to absorb that sort of cost," he says.

But not everyone in the pub trade is crying into their beer at the plight of their competitors. Tony McGrath, the managing director of Saltire Taverns, which owns Le Monde boutique hotel and bar complex on Edinburgh's George Street, Frankenstein's pub and the Golf Tavern in Bruntsfield, is bullish about his company's prospects after this week posting a profit of 332,000 for 2008. After becoming leaner by restructuring the company and shedding 200 jobs, he believes that only the strong will survive.

"There are a massive number of uneconomic pubs and many will go to the wall if they don't change or can't change," he said. "We all have to raise our game, to supply better food, better service. We have to understand that food sales used to be on top of alcohol, now they're integral to the bottom line. We have pubs that serve food or have a weekend bias, and they're thriving."

Another option is for pubs to specialise and find niche markets: some becoming sports bars or concentrating on music; others trying to become like social clubs; yet more trying to feel more like living rooms, with comfortable sofas and wi-fi.

Hide Ad
Hide Ad

Some in the industry believe what we ought to be doing is relaxing licensing laws to ensure that when our teenage kids drink they are able to do so in a pub where a landlord will be responsible for their behaviour and might ensure they drink more responsibly than they might on a street corner or in a friend's house.

Even that, though, brings a rebuke from McGrath. "You can't put the genie back in the bottle. People want to enjoy a glass of wine or beer in front of their plasma screen telly or listening to their smart music centre. Our kids will want to drink as cheaply as possible. As pubs we need to do something special to get people to visit us: the world has changed and pubs have to face up to that or die."