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London, United Kingdom
I am an exchange student who study finance at Regents College for unfortunately only one semester.

Thursday 23 September 2010

Diversification of the pubs

The pub industry faces some problem; every week 39 pubs close in the United Kingdom. There were 58’600 pubs in 2005 and now the number of pubs is around 52’500 according to the British Beer and Pub Association.

There are three major reasons of the decline of pub industry. The first reason is the apparition of coffee shops. From my experience, if you walk in London for three miles, you will see at least four coffee shops like Starbucks, Costa Coffee or Nero. Before coffee shops opened, people went more often to pubs. Even it is not the exact same drinks that are on the card, coffee shops and pubs are in the same industry: drink industry.

The second reason is that there is a huge concurrence from supermarket like Tesco, Asda or Sainsbury’s. Supermarkets have some cheap deals for beer and alcohol.
The last cause is a high level of cost of drinks in pubs because of a tax rise on beer and the inflation.

All this elements make the pubs industry decline. Some pubs as Jack Phillips found a solution; they open the pub at 7am and offer new services, like some cheap coffee and hot breakfasts. The number of sales in coffee and breakfast increased by 40% in one year.



New opening  hours for some pubs
Source : http://www.jdwetherspoon.co.uk/



Personally, I think this diversification is a very good thing for the pub industry. Pubs are a good place for having a enjoy time with friends and for me pubs are part of a neighbourhood’s spirit. They can compete against coffee chain because of their low prices and I think some people are willing to go there in the morning because pubs are part of the local businesses and they want to promote their neighbourhood.

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