Interview Synopsis

UK pubs – Q2 2021 trading & reopening update

  • Credit
  • Consumer
  • Europe

With pubs already reopened for outdoor service, and relaxed rules on indoor mixing fast approaching, attention is turning to how this sector will perform this year. Although less than 25% of pubs have reopened, as a senior executive from Valiant Pub Co Ltd told Third Bridge Forum, “we’re seeing reports of pub companies saying anywhere between 30% and 50% up [like for like trade from a year earlier] on the first 10 days, which is just fantastic to see.”

UK pubs reopening: what’s next for the industry?

When asked if the demand has offset reopening costs, the specialist divided the response into managed versus leased and tenanted pubs. For the latter category, “they also need to be able to place a beer order, and a lot of the leasing tenants, they haven’t actually got any cash following a long time of not actually trading. A lot of pubcos have been having to give credit in order for them to order beer for the first week.”

Some of the key reopening costs have included staffing and table service, as well as fixtures for outdoor service such as heaters and covered areas. “All of that, for the managed companies, it’s an investment, but not as much and not as painful as the leased and tenanted operators.”

Moving on to the topic of cash burn, the senior executive relayed some “horrible figures” that companies had reported, but noted that these were also relative to their overall size. “The balance sheets of a lot of these companies are under severe pressure at the moment, it’ll be very interesting, in 1-2 years, to see how they come out of this.”

Other topics covered include the H2 outlook, consolidation and M&A opportunities, and how pubs will manage payroll costs in the light of Brexit and the National Living Wage increase.

To access all the human insights from Third Bridge Forum’s UK pubs – Q2 2021 trading & reopening update Interview, click here to view the full transcript.

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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