Pubs / 15 September 2011

Cost of running a pub - BBPA report gives vital new data

New data on the cost of running a pub has been released today by the British Beer & Pub Association (BBPA). The information, contained in Running a pub – Guide to costs for tenants/lessees, should prove a vital resource for would-be licensees seeking to operate their own pub, says the BBPA.

The report represents the best available data available from BBPA member companies on the costs of running a pub in the tenanted and leased sector of the UK pub market, and complements the Association of Licensed Multiple Retailers (ALMR) Benchmarking Report which has been published annually for the last five years, and which the BBPA is also urging licensees to examine.

The BBPA is publishing all the information on its website today making it available free-of-charge to publicans who are seeking to run a tenanted or leased pub business. Existing tenants and lessees will also be able to benchmark their own business, by comparing their own costs against industry norms.

The data shows the average cost of running a pub over a range of pub models based on turnover and business types. It covers a wide range of pubs, from those with little in the way of food sales, to those that are largely food-led.

The report takes account of the significant variations that exist in the cost base – even within those pubs that are broadly in the same category. Such costs are based on the size and location of the pub, the age and state of repair, the operating style and the experience of those in charge.

The report, as well as providing average costs, also includes minimum and maximum typical costs providing a range across different types of business.

BBPA Chief Executive Brigid Simmonds comments:

“Our new report should become an indispensible tool for anyone thinking of investing in a pub. Publicans in the leased and tenanted sectors, or anyone else, can download it free of charge.

“Business plans, and the negotiations over leases and tenancies, need to be as well informed as possible, so this is another solid step forward in transparency in the trade.”

Kate Nicholls, ALMR Strategic Affairs Director, comments:

“These latest estimates of costs provided by landlords are in line with the ALMR’s own evidence-based Benchmarking Report, which provides a wider analysis of a range of business performance KPIs, including costs. Taken together, these separate initiatives provide a complete picture for new entrants to judge the health of the business proposition they are taking on and whether rent levels are sustainable. The consistency of the figures across the two reports means they are mutually reinforcing, and we welcome the BBPA’s acknowledgement of the validity of our figures.”

Bernard Brindley, Deputy Chairman of the BII, comments:

“We welcome this information as anything that helps a licensee to make more informed decisions when looking to take on a leased or tenanted pub has got to be good news. What is more is that if you take into account that these figures don’t include an allowance for managers salaries or entertainment then when these are added back in, the data is almost identical to the ALMR benchmarking data, which does include these figures. This can only serve to reinforce how robust both surveys are.”

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