Jasper Jolly and Richard PartingtonWed, 10 February 2021, 6:01 am
Beer sales in British pubs halved last year to the lowest since the 1920s as they faced some of the toughest and longest-lasting restrictions during the coronavirus pandemic, according to industry figures.
Overall beer sales in pubs were down 56% in 2020 to about £6.1bn, a loss of £7.8bn in sales compared with 2019, said the British Beer & Pub Association (BBPA) – the lowest volume of beer sold in at least a century.
The evidence of a collapse in spending comes as the chancellor, Rishi Sunak, faces mounting pressure to take action to prevent a wave of business failures in the hospitality sector that experts say would hold back Britain’s economic recovery after lockdown is relaxed.
The Resolution Foundation said more than half of hospitality firms in Britain – including pubs, cafes and restaurants – have fewer than three months’ of cash reserves left due to the financial damage from multiple lockdowns and weaker demand during the pandemic.
Calling for an expansion in government grants for firms in the hardest-hit sectors at the 3 March budget, the thinktank warned that struggling hospitality firms were more likely to shed jobs and close venues over the coming months, undermining the recovery.
Pub beer sales were 77% lower in the last three months of 2020 compared with 2019, as pubs were closed under various tier systems and an English national lockdown in November. Sales in the second quarter of 2020, during the first lockdown, were down 96% year-on-year.
The BBPA said a government stimulus package was needed, as well as a timeline for the reopening of pubs at the same time as non-essential retailers when the mass Covid-19 vaccination programme allows the latest lockdown to ease.
The Resolution Foundation said across the UK economy total company cash holdings increased by £118bn in 2020, in stark contrast to average declines of about £40bn during each of the last four recessions. But it said firms in the hardest-hit sectors, such as hospitality, were experiencing major difficulties. It said this risked translating into widespread company failures and redundancies unless action is taken.
Jack Leslie, an economist at the Resolution Foundation, said: “While the path to recovery is now in sight, business still face huge problems ahead. Firms in social sectors like hospitality are running out of cash, and many are likely to shed staff or fold altogether unless further targeted support is provided.”
Pubs across the UK have faced restrictions ranging from curfews and bans on household mixing, to requirements to only serve alcohol with “substantial meals”. During the national lockdowns all pubs have been closed, and they have been among the last venues to reopen when restrictions have been relaxed.
Nick Mackenzie, chief executive of Greene King, a pub chain and brewer, said that a return to “complex and unjustified restrictions” would make it unviable for pubs to reopen. He said the sector urgently needed clarification on more support.
Great Britain lost almost 6,000 licensed venues during 2020, according to the industry analysts CGA and AlixPartners.
The BBPA said thousands more debt-laden pubs would be forced to close unless Sunak extended financial support for the sector, including extending a VAT cut and a business rates holiday. The lobby group also asked for a cut in beer duty.
Phil Whitehead, the BBPA’s chair, said the uncertainty over when pubs could reopen was “not sustainable for our sector” as it faced months with zero sales.
A Treasury spokesperson said the government had invested more than £280bn during the pandemic to protect millions of jobs and businesses. “At the upcoming budget we’ll outline the next stages of our Plan for Jobs to support businesses and families across the UK. That has been our priority throughout the past year and it will be the priority for the year to come.”