Half of UK pubs 'may never open again' as sales collapse to zero and landlords expect rent

1 May 2020, 15:26

More than half of pubs, clubs, bars and restaurants might never be able to open again as landlords expect them to pay rent while their sales crash to zero, an expert has warned.

Jonathan Downey, owner of Milk and Honey in central London, said one of the main issues pub owners are facing is landlords expecting full rent to be paid, despite the business making no money.

New figures have shown pub beer sales collapsed by 40% in March compared to a year ago and will be zero in April, highlighting the devastating impact of the shutdown.

Mr Downey told LBC's James O'Brien: "The rent we pay is £251,000 a year, and I we've been there 18 years. We've paid something like £3.9 million in rent since we signed the lease and we're not getting any break at all.

"No rent free period, the only thing (the landlord) has agreed to do is go up to monthly payments. And this is typical of every pub, club, bar, restaurant in the country.

"90 per cent plus of landlords are expecting full rent, no matter that we're all locked down and effectively shut down for who knows how long."

He added: "They just want their money and they want it now and they don't seem to care about what's going on."

Mr Downey also said that if the hospitality businesses don't get a nine month "time out" on rent which is facilitated by government then "more than half" won't reopen again, leading to around 2 million job losses.

"A deal needs to be agreed on a national level between tenants and landlords, it need to work for landlords too."

Some larger corporations have already agreed to waive tenants fees for the duration of the lockdown.

Fullers - which owns around 215 pub locations in the UK - announced on the same day lockdown was imposed that it was cancelling payments for its tenants.

The British Beer & Pub Association (BBPA) said pubs were the first sector to be hit by the Covid-19 crisis after they were ordered to close by the Government.

The fall in pub sales shows the "cliff-edge impact" of the Prime Minister's advice to avoid pubs, followed by the order for them to close, said the trade body.

It welcomed Government financial support to help pubs, but it warned there were "significant gaps" that needed to be filled.

The BBPA said 10,000 of the UK's 47,000 pubs have not been offered any Government grant support, because they have a rateable value above the arbitrary £51,000 threshold, leaving some facing permanent closure.

Emma McClarkin, chief executive of the BBPA said: "Local pubs are the heart of our communities. They are vital socially, culturally and economically.

"Without further support, particularly for the 10,000 pubs who aren't getting any grants, many pubs across the UK are in real jeopardy of being lost forever.

"When this crisis is over, the first place many will want to visit with their friends, family and neighbours is their local pub.

"The Government must invest in them now to save them for the future."

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