Despite high numbers of pub closures across the UK in recent years, Yorkshire’s pubs appear to be weathering the storm with a fall in the percentage of businesses in the sector at higher than normal risk of insolvency for the second consecutive month.
According to the latest research by insolvency and restructuring trade body R3, levels of pubs at higher than usual risk fell month on month by 0.4% in December, after having fallen by almost 2% the previous month. The percentage of pubs in the region at higher than normal risk is currently 33.2%, which represents over 1,000 of the nearly 3,200 active pubs in the county.
Levels of distress in the pub sector were higher in many other parts of the UK than in Yorkshire, with 34.7% of pubs nationally at higher than normal risk of insolvency. Those regions which fared worst were the South East with 40.8% at higher risk; the East of England (39.6%); and Wales (38.1%). The strongest performances came from the North East with 28.8% at higher than normal risk, and Scotland (30.4%).
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, commented: “With ONS figures released last month reporting that more than a quarter of Britain’s pubs have closed since 2001, there’s no doubt that the sector has been amongst the worst hit in recent years. However, the World Cup and the hot summer provided a welcome boost and it is to be hoped that this momentum will continue as people are reminded of the lure of their local. The fashion for craft ales and speciality gins is also bringing new life to the sector.”
Looking at other key consumer-facing industries, Yorkshire restaurants also put in a robust performance this month, with levels of businesses in the sector at greater than average risk of insolvency at 32.8%, below the national average of 34%. In less positive news, 40.7% of shops in the region were at higher risk, above the UK-wide figure of 37.8%.
Eleanor Temple continues: “As we approach the busiest time of year for pubs, restaurants and retail, these businesses need to ensure that they optimise sales as, unfortunately, the New Year tends to bring the most challenges for these sectors. Business owners must keep a close eye on cash flow and should contact a professional, qualified adviser at the first signs of financial problems, as this is when more options will be available to help them.”
R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.