Village pubs facing a brighter future

It was beginning to look like closing time for the country pub – but hopes are mounting that they may be about to enjoy a renaissance, with some counties seeing numbers stabilise after a period of decline.

Changes in the economics of the licensed trade have helped improve viability for many rural pubs, says Peter Brunt, director of surveyors Colliers International, responsible for the pub business in Herefordshire, Gloucestershire and Worcestershire.

Lower purchase prices – and the lower levels of debt required to finance the purchase – mean pub landlords are better placed to keep their business afloat.

“There’s been a big down-swing in the prices of rural pubs since 2008 because the corporate buyers like Punch Taverns and Enterprise Inns have largely left the market, and aren’t buying,” says Brunt. “Instead we’re selling either to breweries or individuals, and both have limited access to mortgage finance, which has helped push prices down.”

“That means we’re seeing sale prices of around six times profit, instead of ten times profit during the boom.”

For country pubs bought at post-2008 prices, the outlook is good. If they manage to make the 20% profit on turnover which most valuers regard as standard, then their prospects of survival are high, says Brunt. Turnover in rural pubs typically ranges from £300,000 to £600,000 a year.

Two Herefordshire pubs, just yards apart in the village of Leintwardine are showing – in very different ways – how the rural pub can make a come back (see case studies, below).

Rural pub (c) Rex Features

Mark Haslam, CAMRA’s Herefordshire campaigns officer, says that a mix of a strong food offer (at The Lion) and a powerful community appeal (at The Sun) are typical of the forces that have saved all but a handful of Herefordshire’s pubs. Today there are 280 pubs in the county, barely changed over the past 10 years.

“For a pub to survive it needs to be a destination. It means investing in the fabric of the building so it doesn’t feel like some 1980s deep-fried shag-pile horror.”
Mike Haslam, CAMRA

“We have a low population, but a useful demographic with more over-50s which means more people with the time and money to spend on eating out. That is a lifeline for many of our pubs, who will never make a good living on the wet trade alone. I suspect 70% of our pubs depend on food sales,” he says.

“For a pub to survive it needs to be a destination. It means investing in the fabric of the building so it doesn’t feel like some 1980s deep-fried shag-pile horror.”

The Sun and The Lion aren’t the only examples of Herefordshire pubs coping with change. The county’s first community pub buyout was agreed this spring. The Crown Inn, Dilwyn, is now owned by the parish council who plan to refurbish the much-neglected pub and let it out to a tenant.

According to Haslam, the future is bright – if politicians remain supportive. “I believe that if politicians hold their nerve on planning issues, and resist attempts to turn pubs and pub gardens into housing, then we could be entering a golden age of the country pub.”

William Watkins and Penny Butley

The Lion

Used as the backdrop for the Only Fools and Horses spin-off The Green Green Grass of Home, the Lion once made regular appearances on TV as Boycie’s new enterprise.

In reality, it had a succession of landlords and the killer blow came when the river Teme – which flows tempestuously around the site – flooded the pub in 2007 and 2008.

Empty and increasingly ruinous, it looked like the Lion would join the long list of former rural pubs.

Yet it is now thriving after a £1m investment and is the only pub in the country linked not to a brewery, but to a mineral water company.

The transformation has been the work of William and Jane Watkins, owners of the nearby Radnor Hills Mineral Water Company. Driving through in autumn 2009 they made what William called a “snap” decision to buy.

Snap it may have been, but the Watkins family has long had an eye for diversification. Farmers on the Herefordshire/Radnorshire border since 1903, they have moved from sheep and cattle into cereals and, for a time, poultry. Their mineral water business was the fruit of a 1990s diversification – and adding a pub was just another step in their business growth.

“We always loved it, and loved its location by the river,” says William. The recession meant the purchase price of £360,000 was relatively modest – although the £800,000 refurbishment certainly wasn’t.

“We’ve tried to look not too closely at the figures,” says William. “The key for us was the location – we knew the flood risks that came with it – but the view of the river on three sides and the old pack bridge meant it didn’t take much vision to see it as the most beautiful pub in England.”

With no experience in the licensed or restaurant trade, fitting out and running The Lion has been a challenge, says Penny Butler, Radnor Hill’s company secretary and the executive in charge of the new venture.

“We quickly realised that the previous owners just weren’t maximising the benefits of the property. For instance, the first floor was entirely staff flats,” says Penny.

“We’ve tried to look not too closely at the figures.”
William Watkins

A major rebuilding programme began whilst they worked on the business plan. The idea was they create a new bar for locals, with a separate entrance, and to provide eight bedrooms above a top-notch restaurant. The idea was to win lucrative business from shooting parties.

“Eight rooms is just right for teams of guns,” says Penny, who estimates shoots account for about one-sixth of their turnover. “It’s not a huge proportion, but it is the most profitable part of the business,” she says.

The restaurant has flourished, too, serving 20,000 covers in its first year thanks to proximity to the foodie Mecca of Ludlow and a strong local food culture.

“It would be lovely to grow the shooting party side of the business. It gets quite booked out over the season, and we only have a few weeks we could squeeze more in, but we want to encourage them to come back, and to grow our revenues,” says Penny.

“The difficult is the ceiling – literally – because we can’t fit in any more bedrooms. We can’t grow the business much further without building another pub.”

William adds: “We won’t build more rooms now, but you never know for the future. There’s an interesting model in which pubs buy houses in the village as annexes, providing extra accommodation, which is how we’d have to do it given our constrained site.”

Turning a profit on such a large capital investment is going to require continued effort and, as Butler admits, a concerted effort to pare-back on costs. But for now – and for the foreseeable future – the Lion is roaring again.

Gary Seymour

The Sun

Thanks to the Beerhouse Act of 1830 so-called “parlour” pubs were once common.

For a fee of two guineas, a householder was licensed to sell beer and cider from their own house. Locals gathered in the front parlour and the landlord emerged from the kitchen with a pitcher of beer drawn from a barrel over the sink.

Sometime in the 1870s, the two cottages in Leintwardine that form The Sun Inn began to trade under the 1830 Act. And that is how things remained under Charles Lane and his daughter Flossie, until Flossie died, aged 95, in 2009.

Although much loved, the pub had acquired a reputation as a peculiarity. Flossie – a unique character – presided from a chair in her private parlour, a chair she slept in until locals converted a ground floor lean-to into a bedroom. The toilet facilities were primitive for men, and women had to share Flossie’s W.C. Although cherished, The Sun wasn’t to everyone’s taste.

When she died, the future of the pub was uncertain and the pub was auctioned. Swift action by local man and former Leintwardine fish-and-chip shop owner Gary Seymour, and business partner Nick Davis, director at Shropshire brewery Hobsons, meant The Sun could continue.

Gary says the idea of a community buyout – rather than a private bid – was never a reality. “Community buyouts can get complicated. You hear stories of problems.”

Gary and Nick raised the cash from their own resources and – helped by a very successful publicity campaign and lots of local goodwill – succeeded in buying the pub before it went to auction.

The new owners paid around £200,000, and have since spent another £200,000 adding an additional bar area, taking capacity up from a crushed 50 to a comfortable 150. The 1,000 sq ft extension also includes new toilets of a sparkling modernity Flossie would not have recognised.

“Without the extension, The Sun wouldn’t be viable,” says Gary. “We were treading water financially until the extension opened in April 2011, losing money if anything. It’s still early days, but the extension makes The Sun a paying concern.”

Sales have risen sharply, up from one barrel a week in Flossie’s final years to a dozen a week today. The original parlour bar remains untouched at the front, and the beer is still served from the kitchen, but now most of it is pumped to the new bar at the rear.

“What we’re trying to do here is go back to the basics of what a pub is,” says Gary. “Rural pubs went through a phase when they all became something like restaurants, and diners and drinkers don’t mix well. You felt uncomfortable sitting there having a pint.”

Unlike a lot of country pubs, food is not a big part of The Sun’s appeal. Drinkers can grab a specially-made pork pie and they may offer a simple ploughman’s at lunchtime to boost the mid-week mid-day trade, but The Sun will not become a restaurant.

“We were treading water financially until the extension opened in April 2011, losing money if anything. It’s still early days, but the extension makes The Sun a paying concern.”
Gary Seymour

“There’s the fish-and-chip shop next door and people are welcome to bring their fish suppers in here if they like. But I don’t want all the clanking of dishes and formality of people eating like a restaurant,” says Gary.

Community involvement is high. For nearly 20 years an annual “mayor” has been chosen to preside at The Sun. For one brief period a dog filled the position, although it chose to abdicate after a fortnight. At least, that’s the official version of events. The mayor’s term of office begins with a feast normally featuring local delicacies such as squirrel casserole.

“We are getting a lot more users from the village than we ever had before. In Flossie’s later years The Sun got a reputation which was difficult to break down. It meant folk might pop in once, for a novelty, but they didn’t come back – you only had to look at the ladies loo to see why,” he says.

Today the bar is once again a well-loved local treasure and busier than ever.

Flossie – always a businesswoman – would have approved.

More on this topic

Do you think village pubs have a prosperous future? Have your say on our forums

See more