The Covid-19 pandemic and the lockdown measures taken against it have ravaged the UK hospitality sector, with a reported 6,000 licensed premises going to the wall last year.
One positive note is that the community pubs sector has so far seen no losses – and last year actually welcomed 13 new members to its ranks. But James Alcock, chief executive of Plunkett Foundation, the charity for rural community businesses, warns there is more damage to come without government intervention.
“It’s pretty grim for the hospitality sector,” he said. “We’re very sympathetic to the loss of hospitality sector businesses across the spectrum. The huge closures are not being met by adequate government interventions which is a shame. We’re working with the pub industry as a whole to make recommendations for what is needed.”
So far, says Mr Alcock, the community pub sector is bearing up, with 60% of its pubs staying open by offering takeaway sales.
“The main reason was to maintain their other volunteer aspects, to support the local community; they ran volunteer car schemes to get shopping to people, they set up shops and distribution, they checked in on isolated and elderly people.”
With most pubs forced to lock their doors through the current lockdown, the community sector is in “a more fortunate position, with patient capital running through the business,” he said.
For tenanted pubs, community owners are happy to pause rent payments, while lenders like Co-op and Community Finance have offered payment holidays.
Even so, Mr Alcock is not sure how long these businesses can survive a lasting lockdown, and Plunkett “will be continuing to fight for restrictions to be lifted where it’s safe to do so”.
Meanwhile there has been a huge increase in interest in community ownership. Existing community pubs have come to Plunkett looking for help setting up additional community services, says Mr Alcock. The organisation has also been giving them advice on how to put government guidance in place and hold AGMs.
From outside the sector, there has been a 50% increased in inquries from
new businesses looking to set up community pubs. Mr Alcock notes this comes alongside a 50% increase in the rate of closure in the commercial pub sector.
In response, he says Plunkett has made a 100% increase in days of support it allocates to new and existing groups.
“We expect to be busy in 2021 allocating support to businesses,” he said.
“To this point, we’ve not seen any pubs forced to permanently close. It comes back to that co-op business model and having that inherent resilience in that model.
“We’re working with 25 new groups in the pipeline, and during 2020 we supported 13 new pubs through the opening process – it shows a sense of confidence and belief in the co-op model.”
But while this is good news, he warns: “Watch this space – there is only so long a business can continue without being able to trade; the sector has missed important business periods, Chrismas and bank holidays.”
In terms of government support, Mr Alcock says the community sector is faring no worse than the rest of the industry but “the hospitality sector is losing out full stop.
“Compensation measures are not sufficient for the level of loss that is occurring. Smaller independent pubs and rural pubs in particular, and pubs on the urban fringes and suburbs, are at risk of losing out with the number of closures we’re seeing,
“If there isn’t support, if communities not helped to save them, they’re lost for good. In terms of deprived urban areas or market towns, the pub might be the last surviving asset for a community. If a pub closes in a city centre it’s sad but people have other places to meet and find support.
“There really does need to be more support to enable communities to save those assets.”
To make life harder, the More Than a Pub scheme – operated by Power to Change – closes at the end of March. “It’s been a wonderful scheme,“ says Mr Alcock, “Power to Change have supported two iterations and have done a lot but it’s not in their business plan to extend it.
“Beyond that, Plunkett will be supporting pubs as much as we can – we’re looking to new funders to try to get new finance.”