South east reports highest risk of pub insolvency in UK

An industry expert has warned that many pubs are facing bankruptcy PPP-160801-122000001

Over one in four public houses (26 per cent) are reported to be at risk, according to research of over 787 businesses by restructuring and insolvency trade body R3.

The figure has increased by over four per cent between August and September.

This is the biggest increase since August out of all 11 sectors monitored by R3.

The insolvency firm also highlighted technology and IT, professional services (lawyers and accountants) and transport and haulage businesses as the three sectors with the greatest proportion of firms above average risk.

Technology and IT firms remain the sector most at risk in the region with 37.7 per cent of businesses now at a higher than normal risk of insolvency.

Mike Pavitt, chairman of R3’s Southern Committee said: ‘The pub sector has seen a number of challenges over recent years but ultimately its success requires consumers to have both disposable income and to be culturally disposed to going out rather than staying in.’

Mike, who is also partner and head of the corporate restructuring and insolvency group at solicitors, Paris Smith, believes factors such as the national minimum wage and a continuing cultural shift towards personal entertainment devices and internet-based viewing pulling people away from the option of social entertainment, such as sports coverage in pubs, are behind the problems.

Mike said: ‘There is also the effect from people “pre-loading” so a lot of people will now go out having already had their initial drinks at supermarket prices at home. The national minimum wage is also putting pressure on pubs.’