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How the British pub has survived is "remarkable."

Published:  07 May, 2009

In the present economic climate and the difficulties the public house trade has had to endure over the past few years the survival of the community pub is "nothing short of remarkable" comes the verdict of a new market report.

The problems the industry has had to face includes bans on smoking, new licensing laws and controversy over 'binge drinking', higher taxes on alcohol and the downturn of the economy.

New research from market intelligence providers Key Note in the survey Market Report Plus - Public Houses, has said that given these problems, the survival of the small community pub is quite remarkable and it is a testament to its role in community social life and its adaptation to new consumer demands.

Even so the number of pubs in the UK is shrinking by around 2,000 a year, and total pub turnover has contracted by 3.4% since 2006.

Among the factors underpinning the decline in the public houses market has been the growing price differential between supermarket and pub prices with 87.5% of consumers surveyed in 2009, who agreed that buying drinks from a supermarket is much cheaper than buying them in a pub.

These trends have forced the closure of many pubs, with the British Beer & Pub Association (BBPA) and the Campaign for Real Ale (CAMRA) claiming that it has now reached crisis point.

Several thousand pubs are likely to close during the years of the recession and Key Note estimates that the national total will be down to 55,350 pubs by mid-2009.

Other research conducted for Key Note in September 2008, found that 41.3% of adults go to the pub for just a drink at least once a week, although this tendency was higher among men than women (45.7% compared with 37.4%).

In terms of consumer spending on leisure outside the home, expenditure on alcohol accounts for a far greater proportion of consumer spending than any other item.

Key Note estimates that consumers spent £28bn on on-trade alcoholic drinks in 2008, with the next highest expenditure recorded for restaurant meals, at £23.25bn.

The Market Report Plus identifies the long-term challenges to the pub trade as including the continued existence of too many small, wet-led local pubs. An an old-fashioned approach to ownership and management, based on beer barrelage. Competition for the 'Leisure Pound' out of home from bars and restaurants, and the price differential between bar prices and those in the highly competitive off-trade.

The value of the market at current prices is expected to drop by 1.9% in 2009, before remaining static in 2010 and then recording a gradual increase to 2012.

The number of UK pubs is forecast to show a year-on-year decline over the 5-year period.