Pubs and bars 'most distressed' UK businesses as critical problems soar

19-Apr-2012 - Last updated on 26-Apr-2021 at 16:53 GMT

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Pub business failures are threatening British culture and leaving the sector among the country’s most distressed business sectors, according to the latest Begbies Traynor Red Flag Alert statistics

Pubs and bars are among the country's 'most distressed' UK businesses with a massive 95 per cent rise in critical problems faced by the sector in the first quarter of the year, according to the latest Red Flag Alert statistics from Begbies Traynor.

The figures show pubs and bars are suffering more than any other sector with the number of companies facing critical problems almost doubling since the last survey in January while the same distress levels actually dropped by seven per cent across all business sectors.

According to Begbies Traynor the social implications of business failures or administrations in the pub and bar industry are as great as when football clubs face problems. Separate statistics released last month by Begbies Traynor showed football businesses were experiencing 19 times the average levels of distress in the country.

Ric Traynor, chairman of Begbies Traynor Group, said the increased trouble for both sectors was actually threatening British culture. "The fact that pubs, football and other sports clubs are on their uppers is not simply a matter for economic concern, as these once thriving hubs of community and regional identity are part of the fabric of British society, and once lost can never be replaced," he said.

"Whether you view that as a good or a bad thing, the fact is it will, in the long term, change the character of the country as a whole and this should be recognised," Traynor added.

Escalating taxes

The firm attributes the increased levels of critical distress in the pub and bar sector to changes in consumer behaviour and escalating taxes and Julie Palmer, a partner at Begbies Traynor, said the latest figures showed it was local pubs being hit the hardest.

"Across the UK, 50 pubs each week are closing for good. Perhaps it is a fact of life as legislation and economics impact the sector, but the local pub is further down the road to becoming obsolete," she said.

The survey from the professional services consultancy firm monitors the number of companies experiencing significant or critical problems. Companies are judged to be facing critical distress if they have high County Court Judgements (CCJ) of owed debts or winding up petitions.

Improved fortunes for manufacturing, including in the food and beverage sector, helped slow the rise in business distress levels overall.