IN A boost for the South West’s pub industry, research by R3, the insolvency trade body, has revealed that pubs in the area are outperforming their counterparts across the country.

Whilst 35% of the South West’s pubs have a higher than normal risk of insolvency, this is the smallest proportion in any region in England and Wales, followed by the North East (35.7%) and Yorkshire (35.8%).

R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.

Ross Connock, Chair of R3 in the South West and Director at PricewaterhouseCoopers, said:

“The beginning of an economic recovery should see an improvement in the fortunes of the hospitality and leisure industry as people will have more money in their pockets to spend on going out. Given the recent floods, it is encouraging to see the pubs in our region are maintaining an edge over their counterparts elsewhere in the country.”

At the other end of the scale, 38% of London’s pubs have a higher than normal risk of insolvency, whilst the South is the poorest performing with 40% deemed to be at a higher than normal risk of insolvency.

Despite the strength of the region’s pubs compared to the rest of the country, the South West’s pubs are still showing more signs of financial distress than many other local sectors: only restaurants (37%) and IT firms (36%) have a higher proportion of businesses showing signs of distress.

Ross added: “The pub industry still has some headwinds to deal with: they generally run on tighter margins than most other businesses, meaning they’re often likely to be treading a financial tightrope.

"An overall decrease in High Street footfall and the smoking ban have created challenges for the pub industry too. The 1p cut in beer duty announced in the Budget will be welcomed by pubs in our region though.”