Pubs beer sales drop nearly 10% in the last quarter of 2008
Beer sales are sinking and many pubs are struggling to survive. Pub closures have escalated to nearly six a day. Pubs have been struggling for some time – last year they were closing at the rate of five a day, amid rising costs and pressure from developers. But the credit crunch is hitting them even harder.
What’s a pub closure to a British beer drinker if he is sitting on a debt pile of GBP 60,000 (on average)? Five pubs a day – that’s nothing. Families in Britain are chucked out of their houses at the rate of one every ten minutes because they can no longer pay their mortgage.
Previously there has been a trend for drinkers to shun pubs and buy beer in supermarkets to drink at home. But fourth quarter figures showed supermarket and off-licence beer sales down by 6.5 percent too.
The slump is also bad news for the government in terms of taxes levied on beer – tax revenues from beer sales were down GBP 181 million since the last budget in March, compared to the same period in 2007.
Drastic times call for drastic actions. In January, JD Wetherspoon began offering cheaper beer, with certain pints now costing just 99 pence, the lowest price in decades.
JD Wetherspoon, which runs more than 700 pubs across the country, drastically dropped prices on bottles of San Miguel and pints of Greene King IPA. The average cost of a pint these days is about GBP 2.75.
Bottles of wine are also now being sold for less than a fiver, while selected meals will sell at about 3 pounds.
There is no set date for the price slash to end.
Although January is a good time to slash prices because business tends to be slow, industry observers fear that the JD Wetherspoon price cut could start a price war between pub chains.
