The hospitality poor mouth

I've gone from chatting to Marco Moretti and Paolo Peroni to an old friend, Séamus Smithwick. €1.50 saved on every pint and lessens the hangover. He's a good man, Séamus.

Talking to a lad yesterday sold his pub around 2000 went at construction and has a multi million business now. His old place is derelict now , closed after Celtic tiger died. Got a great decade from 1990-2000, Jack Charlton years n meath football humming

Said he wouldn't take on a pub now if he got one for free- no money in the majority of them n no quality of life. Says it all really

Again the data just doesn’t support this view. Household disposable income growth is outpacing Household expenditure growth. People are able to save a higher percentage of their significantly higher disposable incomes than they were able to pre-COVID.

https://www.cso.ie/en/releasesandpublications/ep/p-hs/householdsavingq12024/

The rental one is a nice narrative to point to but proportionally not that many people pay open market rents.

Owned mortgage free: 31%
Owned with mortgage: 39%
Social Housing: 11%

Private Rent: 19%

Interesting, figures on the demographic spread of that disposable income outpacing household expenditure would be interesting to see too (or even median rather than mean figures). A relatively small cohort of high net worth or high earning individuals could be wildly skewing that dataset…

Just looking at the hospitality sector as a consumer: prices are extremely high compared to our European counterparts (I'd say 150% to 200% of that which I experienced in France's tourist regions of Normandy two weeks ago so not comparing to Costa Del Sol, Portugal or other poorer regions of Europe.), input costs have undeniably increased and on-premise alcohol consumption has dropped significantly but is this enough to explain the raft of seemingly busy restaurants (many operated by high-profile restaurateurs with successful track records) closing their doors? Or is the general consensus that the majority of these closures are an exercise in getting warehoused tax liabilities written off in the liquidation of Limited Companies before starting afresh under a new trading name?

That and a lot of young adults live at home now due to home ownership totally out of reach. Income that would be put into paying for a home. Which technically paints a bad picture other than lots of wealth and disposable income

Then why are the more expensive pubs so often the busy ones. Even in a non tourist area like Limerick ?

Down here the busy pubs are the ones offering the best "product". There is certainly markets for cheap beer with people like students or scumbags but it's quite clear just from walking around that the busy pubs are the well run ones despite the price.

There is no sign so far of a new wave of Tuborg or similar like during the recession.

I didn't mean the pub in the midlands because I have never been there but it's obvious in Limerick that those are the demographics who will drink anywhere for the cheaper drink.

The vast majority are still following the quality establishments or the ones offering a good niche product. I see nothing to suggest that price is such an overwhelming issue that people will go somewhere just for the price so the idea that becoming an "everything for 5" pub being such a no brainer selling point doesn't hold up.

This is kinda going off topic but what beers could publicans sell that wouldn’t be as expensive as Heineken or Diageo products?
What cheaper than bulmers but as good a quality as bulmers offerings are there that public and can sell?

As far as I can see all craft beers are much dearer.

The only stout I know of that’s close to par with Guinness and cheaper, is beamish.

Pubs can sell everything cheaper, the reason they keep raising their prices is to offset the drop in customers and people consuming alcohol. Most publicans honestly feel like they are entitled to peoples custom and have no clue how to actually entice or pull people into their premises, they believe that if they just offer the most basic place to have a pint, a couple of crappy screens for football and incredibly mediocre food then people will come flocking because that's the way it has always been but as is evidenced in this thread people are far more concerned these days about how they spend their money and getting bang for their buck which the majority of pubs just arent giving these days. A big issue which they also refuse to understand is our alcohol consumption as a country has been dropping year over year for just under 2 decades now, there simply isn't a need for as many pubs as there used to be.

They are so entitled that they supported MUP which would only raise prices for home drinkers as a way to try and push them back into pubs.

Also craft beer will always be more expensive than diageo, heineken et al due to the economies of scale the latter operates on which the former can never match.

ah come on, that’s one hotel and its a one sided report with absolutely no evidence.

I’m not saying it didn’t happen but it’s a bit unfair to say “look how cleaners are treated! Look!” as though it’s just the standard. Come on.

I went back to a Chinese buffet place near me..

Recall it being about e15 for the all your can eat, buffet troughs.

Nah, its now e26.95.. and the place was empty.

Publicans seem to blame the State for their woes, rather than their suppliers, or their overheads.

They want excise cut, even though excise hasn't increased in years.

They ignore and don't mention that Diageo put up the cost four times since COVID.

Why don't more pubs offer Beamish?

Why don't 100 or 1,000 pubs join forces, and approach a brewer to buy in bulk, at much lower cost?

One of the larger Irish brewers, other than Diageo/Heineken/C&C.

Spoons can sell Ruddles Best for under GBP 2.00 in Britain, as they are the largest buyer of Ruddles Best.

Why don't 1,000 pubs approach Greene King to buy beers in bulk? If they could even get the price down to 5.00 in Dublin and 4.00 outside, that would help.

I don't think they want to innovate.

I do notice that Irish hotels always have the latest check in times and the earliest check outs. That would lead me to believe that they are using far less staff for the same amount of rooms.

Bear in mind that the GP on stout is one of the lower GP across the product mix.

For example, the GP on mixers is massive.

One of the attractions of Spoons is that the mixer is included in the price of the spirit.

I'd say a well-run pub, with high prices, can make 65-70% GP.

I recall news articles about Dublin pubs making 25% net profits.

Spoons makes under 10% net profits, as it passes the savings to its customers.

Pubs are been hit by a number of factors

1. The increase in ESB & Rates & Insurance etc
2. Many Punters having less disposable income due to Rents, increased Bills, little left for a few pints
3. Many young peoples disposable income going on drugs ie cocaine with nothing left for alcohol

Also a lot of young people who don't want drugs or alcohol and tent to live healthier than previous generations.

I think the wholesale cost of Guinness is about €2.06 including excise. The rest is to cover gas, expenses, profit and vat. A very lean low cost high volume operation could conceivably sell at €3.20/pint. The average pint of stout is €5.86, so that's €1.09 in vat and €2.71 for the publican or a margin of 132%. Using a publican methodology another 6c on the wholesale cost results in a 17c overall increase, 6c to the wholesaler 6c for the publican and the balance to the government.

Publicans don't really do pricing properly, they all use margin pricing. They fix their margin so when the base cost moves up, the final price moves up. If all Publicans are independently using a similar system you get equal price movements across the industry without the need for coordination. Margin pricing basically allows for little real competition and poor cost control.

I've no doubt running a hospitality business can be tough with cost increases but, it might be hard to admit but some owners need to ask themselves what are they offering to people. There's really stiff competition now, I work in a city center location, between kiosks bakeries cafes etc I can count 21 places within a 10 minutes walk I can buy coffee. I only ever go to 2 places both locally owned cafes, one makes exceptional coffee and does a very clever monthly blend which I always like trying new coffee beans. The other is a really nice cafe with extremely good staff and service. Still under 3 quid for an Americano too. They are both busy most days I go.

Pubs the same how many of them offer literally the same drink choices, few screens for matches, same standard pub food, burger, goujons, curry etc. A pub I really like always has a tap or two which changes regularly and offers a pint from a local or Irish brewery. Again it's usually doing a good trade. A bit of innovation in such a competitive market is needed if they want to survive.

Diageo charging the trade €1.46 ex VAT per pint is an absolutely huge rip-off.

They're selling (ex VAT and duty) into the off-trade for less than that, even though it has to be canned or bottled.

The Cafe bar bill from the noughties died a very quick death due to how many FF members were publicans at the time.

If the tried to do it again now they would run into the same lobby groups who pushed for MUP and lied through their arses to get it passed.