On the 18th of September, the North East faced new, localised restrictions due to mounting worry over rising Covid-19 cases. According to Health Secretary Matt Hancock, there has been “concerning rates of infection” in the region and new rules including bars and pubs having to shut between 22:00 BST and 05:00. Due to this, pubs across the North East are forecasted to take a huge financial hit.
The safety measures have been deemed necessary for the health of North East residents. But the financial health of the service industry is in peril once more. During the national lockdown, pubs throughout the country suffered monumental losses with revenues plummeting by 87 per cent between April and June this year. Although we saw a boom in business after the 4th July, when Britain enjoyed its first night out since lockdown, landlords in the North East are once again concerned for the future of their businesses.
With infection rates in Sunderland reaching 103 cases per 100,000 people, Tyneside reaching 93.4, and Gateshead reaching 83.6, it’s time for pubs to close their doors early once more. Currently, bars and clubs will not have to fully close, but even the introduction of a 10 pm cut-off will result in some serious financial knock-on effects. So, just how much is the North East set to lose?
According to the Office of National Statistics, the average cost of a pint in the UK is £3.80 (as of August 2020) and 8,059,495,997 pints were sold in 2019. This means that, per day, the people of the UK buy a grand total of 22,080,810 per day (on average)—that’s 1,380,050 pints per hour. Divided by all of the pubs in the UK (30,885) we can conclude that the average number of pints sold per hour in each UK pub is 45.
So, how much is the loss of late-night hours likely to impact the financial standing of pubs in the North East specifically? There are currently 1,360 pubs operating in the North East, so the total pints sold per hour in the region comes to 61,200. Per week, the new localised lockdown rules will scrape an average of nine hours per week off each pub’s operating times, meaning that in total, the region will sell around 550,800 pints less than before.
Altogether this sales loss could equate to roughly £2,093,040 each week for as long as lockdown restrictions continue. This whopping total does not bode well for the prosperity of local businesses in the region.
With such uncertainty for the future and no sign of returning to ‘normal’ on the horizon quite yet, it’s more crucial than ever for pubs and other small businesses to stay on top of their finances and futureproof their businesses. For many, this will involve bringing in expert financial advisors to help keep their business afloat. Small business tax specialists, Wisteria Accountants, recommend that small and medium businesses should do everything in their power to futureproof their cash flow during this financially turbulent period.
Pints may not be flowing for the time being, but by taking this savvy financial advice onboard and contacting a third-party expert or taking on your own financial lead, pubs in the North East and throughout the UK should be able to weather this storm for the coming months. The celebration drinks will certainly be at the ready when it is safe to operate at their normal hours once more.
ONS Average Pint Price: https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czms/mm23