Adaptability is the key for licensed trade operators

With the new drink-drive rules in Scotland firmly established, adaptability has been fundamental to the collective mindset of licensees. Here, Alan Gordon takes soundings from the hospitality industry and finds an encouraging will among business owners to roll with the changing circumstances.

Commentators have been unanimous in their view that the pub sector would have to evolve to survive in the new environment created by Scotland’s lower drink-drive limit.

And it is gratifying to report that, after just over a year of the new legislation, the trade has responded admirably with innovative thinking, radical overhauls of its offering and a barrage of products designed to allow people still to enjoy a night out.

The message coming through from practitioners is that, while the new limits have had a significant effect and sales are unarguably down, the most noticeable consequence has been changing patterns of pub-going behaviour.

A consensus view last year was that the “wet-led” pub, the traditional outlet with only a few basic snacks on offer, would be the hardest hit by the changes, and that is still very much the case. But it is becoming clear that it does not apply across the board.

Local bars in high density population areas in Scotland’s major cities – which have a strong following among customers who have less reliance on personal transport – have held up better than expected.

In businesses where more people arrive by car, there has been a shift in pub visits away from Thursdays and Sundays. Both these days until last year were seen by many as the bookends of the weekend.

They have now been abandoned to a noticeable degree by people who are afraid that if they have a drink the night before they will be in breach of the new limits the next morning. Much of the publicity at the time of introduction was designed to reinforce this fear.

These customers are transferring their allegiance to Fridays and Saturdays, when they can have a guilt-free lie-in the next day – making these high turnover days busier than ever.

Country pubs, to which people are obliged to drive, are being affected as badly as predicted, but they are responding by offering drinks such as T2 from Tennent Caledonian, a reduced alcohol lager with an ABV of just 2%.

Knowing that customers are seeking extra choice in this area, the on-trade is also introducing new low alcohol wines and renewing glassware ranges to include schooners for beer, equivalent to two thirds of a pint. Wine can also now be sold in 75ml glasses, less than half the standard 175ml size.

But what has been most striking in the trade response has been the continuous investment in new venues, almost exclusively food-led and privately-owned by experienced operators whom lenders are delighted to fund.

A few examples in Glasgow include:
• Eusebi, in Gibson Street, abuzz with Italian meals, snacks and coffees;
• The famous Doublet in Park Road, sold over the year for more than £400,000;
• Raffaelle’s on Milgavie Road, serving drinks meals and coffees all day;
• Caffe Parma in Hyndland, a new addition to the Paperino’s family;
• The Criterion Bar and Velvet Elvis in Thornwood, about to become specialist craft brewing outlets;
• The old Halt Bar in Woodlands, taken on by West Brewery.
• Boclair House in Bearsden, now transformed into an exclusive wedding-oriented venue.

Further afield, existing operators are finding the appetite to extend and expand, with major bank-funded hotel expansions in Fort William and Greenock. What we are not seeing is any rush to open the next wet-led bar.

The trade is also learning to accommodate internet-based voucher schemes by using them to fill tables and bar stools at quiet times, but imposing sensible restrictions on their use during already busy periods.

In summary then, operator, investor and entrepreneur confidence in this property market sub-sector remains robust. This welcome climate is underpinned increasingly, however, by often stubbornly selective high street lending policies even with well-considered proposals in attractive or otherwise proven locations.

Price inflation and growth in real value may still be some way off, but the indicators remain strong in a still challenging environment: as ever, in a highly resilient sector where aspiration lives on, old habits die hard.

What we are without doubt living through is a drive by government, inspired by the best intentions, to change people’s behaviour and reduce alcohol consumption. The tax, legislative and licensing regimes are all being bent to this aim.

But as we enter a rapidly changing licensed trade environment, it has to be asked: are government measures really affecting the problem drinkers they are trying to reach?

Or is it a case of spending a lot of time and money on preaching to the converted – those who already drink responsibly and have never had any intention of doing otherwise?

Alan Gordon is DM Hall’s Principal Commercial Partner for Scotland, based in the Glasgow North office.

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2018-12-18T10:48:27+00:00