Pub administrations increase 24% as cold weather takes toll

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Administrations in the pubs, clubs and bars sector for Q4 2010 increased by almost a quarter at the end of 2010, as the unprecedented December weather took its toll on licensed operators.

The statistics from the sector, published by the Insolvency Service, show a 24% increase in administrations from 38 in Q3 2010 to 47 in Q4. However, this is a year-on-year fall of 22% from 60 in Q4 2009. Creditors’ Voluntary Liquidations (CVLs) also rose by 5% from 189 in Q3 2010 to 198 in Q4.

Commenting on the figures, Simon Bower, partner at Baker Tilly Restructuring and Recovery LLP, said: “While the sector overall saw less casualties in 2010 versus 2009, the public sector cuts seem to have already had a negative impact on consumer confidence and there is certainly evidence of spending being reined in. Also, the adverse weather conditions discouraged customers from venturing outdoors to spend. This is true of some areas more than others, with more rural areas seeming to have fared worst overall.

“It will be in the first quarter of 2011 when pressure may mount on the industry as it is hit by a traditionally quiet trading period, price increases driven by rising costs and the impact of the VAT increase. However, with many sporting fixtures and occasions such as the royal wedding taking place this year, savvy traders should make sure they are well placed to take advantage of every opportunity to aid recovery.”