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Zero growth in rural areas

Scotland’s pubs blame higher costs for festive slump

Pub trade suffered a weak Christmas (photo by Terry Murden)


Scotland’s pubs and hotels have blamed higher costs for poor Christmas trading with not a single country venue reporting any growth in business.

Higher rates and wage costs contributed to more than half the country’s pubs suffering lower takings over the festive period.

Rural areas were particularly badly hit, signalling a worrying trend for those in the tourism industry.

Paul Waterson, Chief Executive of the Scottish Licensed Trade Association which produced the figures, said they were an indicator of the key challenges facing the wide range of small to large businesses who trade within the wider hospitality sector.

He said that after successive years of decline, there were signs of growth with 39% of businesses reporting increases, and the “craft” beer and gin revolution was proving popular. There were also signs that the threat of minimum pricing was reducing the impact of supermarket drinks.

“But this is offset by poor Christmas trading with 53% of outlets saying they were down at Christmas/New Year,” said Mr Waterson

“Government legislation, whether this is national or local, continues to be the biggest challenge facing retailers, particularly for rural operators who are often the lifeblood of local communities.

“Worryingly, zero rural operators reported growth over the Christmas/New Year period.   This is extremely concerning given the importance of tourism to Scotland’s economy.”

Greater use of online services is helping some firms and the sector is working with the Scottish Government and other tourism bodies to ensure businesses and visitors have high speed wi-fi and mobile coverage in remote and rural communities

Another area of positive news is that more and more on trade retailers are stocking beers, food, spirits and soft drinks from local producers,

Mr Waterson commented “The buzzword in 2018 is to expect growth in anything craft and as a sector we have a massive role to play in delivering Scotland’s food and drink strategy.” 

The report is the latest half yearly review from the SLTA and provides key insights on food and drink performance directly from front line retailers across city centre locations and rural locations.

Retail Headlines.

  • Relative to the total calendar year, Christmas sales were poor, with 39% of outlets growing in the calendar year, but this fell to 28% at Christmas & 53% of outlets showed a decline at Christmas.
  • Multiple outlet operators out-performed single outlet operators (40% in Christmas growth versus 22%).
  • Once again rural outlets are under real pressure – no rural outlets were in growth at Christmas.

Category Performances

  • Independent/craft beer sales out-performed the market at Christmas. By contrast mainstream beers showed 59% of outlets in decline.
  • 75% of outlets are now stocking independent/craft beers versus 62% last year.
  • Spirits & soft drink sales are marginally ahead of the market.
  • Although food sales marginally out-performed the market at Christmas, sales across all categories of outlets who sell food are on a par with those who don’t.

Macro-Economic Challenges.

  • Government legislation. (National, Local, Rates, Minimum Wages) consistently remains as the biggest challenge facing pub and bar operators.
  • The threat of competition from off trade has fallen
  • Commercial Rates remain a huge concern with 75% of outlets mentioning rates as a big concern.

 Outlook

  • The long-term outlook is mixed, less outlets are expecting growth versus their actual performance in 2017, but by contrast less expect a decline
  • On the way up:  Anything Craft, Scottish Gin, Independent/Craft Beer, Online bookings.
  • On the way down:  Mainstream beer & spirits.

 



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