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Has there ever been a time when drinking establishments had it easy? Historically speaking, there’s been the likes of prohibition to contend with. Now, punters are more likely to be found knocking back cheap supermarket booze from the comfort of their own homes than visiting their local drinking establishment. But, through thick and thin, pubs have survived.
In 2022, the challenges facing Britain’s pubs are very different, spurred on by the current political climate, the pandemic and the fallout from Brexit. Below we explore the main challenges facing pubs today. Knowing the problem is the first step to overcoming it, and then pubs can plan their survival.
Pubs are battling inflation as supply chain disruption, the conflict in Ukraine and labour shortages wreak havoc. Hospitality businesses reported an average energy price increase of 41%, a 19% rise in staffing costs, a 17% increase in food and 14% in drink prices!
As a result, menu prices are set to increase dramatically—a survey by UK Hospitality predicted prices would rise by an average of 11% this year, adding to the cost of living crisis in the UK. Many people won’t afford the increased prices, and pubs might see demand waver.
This is a big blow for the industry as businesses are recovering from the effects of the pandemic and have limited cash reserves. Many pubs will struggle to survive unless the government intervenes and offers support.
After the double crisis of Covid and Brexit, UK’s hospitality businesses face severe staff shortages. The pool of potential talent has been heavily restricted as EU hospitality workers returned to their home countries during the pandemic and many who were furloughed didn’t return to the industry. This has cut the market off from a whole host of skilled individuals.
As a result, pubs have to offer workers higher wages and incentives—great news for staff and their families who were previously struggling to make ends meet. But, this rise in employment costs hits employers directly, with no help from the government to make it possible. In this situation, do pubs hire fewer staff to save money and risk dropping standards? It’s a tough choice for pubs as they find themselves needing to do more with less.
In Britain, our pubs have been the centre of the community for as long as we can remember. They’ve previously been free from any serious local competition—especially in rural areas. In 2022, however, it’s a whole different ball game, with country pubs now closing at an alarming rate.
City pubs are faring no better, with the likes of Living Ventures, Brewdog and Alchemist—all beloved Trail customers, might we add—reshaping the competitive landscape by playing up to Millennial expectations. The ‘reputation economy’ has become ridiculously profitable, with venues opting to create an experience tied into social media, events and themes.
In 2022, pubs will need to rise to the challenge set by their competitors and consider making changes. This re-tooling needs to range from raising brand standards and diversifying what’s on offer—including foods, drinks and even themes—to hosting events and providing customers with more to do than drink.
In the past two years, the increasing use of technology has reshaped our world. The pub industry has embraced operations apps to improve productivity, brand standards, and front of house capabilities.
But customers now have higher expectations—they want contactless payment methods, menus and online orders. Acknowledging the demands and applying some fresh thinking—be it technology, diversification or a total rebrand—will be the key to staving off the new wave of competition.
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