What does the slide in shares in the managed pubs and clubs sector mean for Brighton's £60m late night economy?
Share prices in the managed pubs and nightclubs sector are in freefall as the strength of consumer spending starts to falter. Share prices in J. D. Wetherspoon lost 28% of their value amid profits warnings in November. The downturn at Wetherspoon is symptomatic of a broader malaise in branded pubs and nightclubs on the high street.
Yates Group also issued a profit warning in November and saw their shares plunge 11% in January, Old Monk has appointed administrators, SFI Group (Slug & Lettuce, Litten Tree and Bar Med) have had their shares suspended and nightclub operators Luminar saw its market value fall by £38m after poor Christmas trading (download the story as it appeared in The Times). Po Na Na has given distinctly cautious trading statements and Regent Inns, owners of the late night Walkabout chain, has seen like-for-like sales slip by 3.2% over the past year.
The purchase price for high street pubs, similar to those favoured by J. D. Wetherspoon, have fallen by as much as 80% in the past year largely due to a downturn in casual town centre drinking. (Barry Gillham - Felurets). Meanwhile Scottish & Newcastle is trying to sell the freeholds of a number of its managed pubs - a job made no easier by the bad news at Wetherspoon.
Brighton's club and pub industry contributes about £60m to the local economy annually and it is a long-established and popular feature of city life but any national downturn will undoubtedly be reflected in our own local scene.
This downturn could not come at a worse time for the sector which is faced with a great many challenges in addition to declining custom and decreased profitability and share prices .
The proposed reform of the licensing laws, which will allow for extended opening hours might seem like a golden opportunity for the sector to enhance its profitability but that remains to be seen. Influential voices are calling for the changes to be accompanied by increased powers to close badly managed clubs and pubs swiftly and new measures to help limit the growth of the night-time economy. Lobbying has already started to demand tools for managing any potential increase in public disorder that comes out of 24 hour opening hours. Could this lead to pubs and clubs paying for additional security measures?
Other challenges include ensuring representation in the city's emerging tourism strategy and addressing the problems of violent crime that appear to be associated with the late night economy.
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