Pub closures: ‘Each week we were getting new prices. They were doubling and tripling’

Those publicans who believed that the reopening of pubs and bars after Covid-19 would be the end of their troubles are now coming to the realisation it was only the start of a whole new set of problems.

In the long hiatus – nearly 18 months for some Dublin pubs and a year for those outside the capital – many staff were lost to the pub trade for good, and did not return. The ones who stayed were able to command a premium.

People who became used to drinking at home continued to do so even after the pubs reopened. Older regulars were afraid to go, others simply got out of the habit of going. The trend towards drinking at home, known as the off-trade in pub parlance, was already well established by then.

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Latest figures from the Drinks Industry Group of Ireland (DIGI) show the attritional rate of pub closure is accelerating. There have been 457 closures since 2019. In total, one pub in five in the State has closed since 2005 – a year that coincides with the first full year of the smoking ban.

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Those closures are most pronounced outside Dublin, a county which historically had many fewer pubs per head of population than rural Ireland and where only 3.4 per cent of pubs have closed in the last 18 years.

A quarter of all pubs in Co Westmeath closed in that time, the number of operating establishments in that county reducing from 213 to 160. Among those that closed was the once popular Murphy’s Law pub on Mardkye Street, Athlone. In May last year, owner PJ Kelly announced on Facebook he was shutting it down. At one stage, Kelly and his brothers had three pubs in Athlone. Now they have none.

We did the forecast and said that if we carried on for another six months we would be crucified. We’ll end up owing the banks money

—  PJ Kelly, former publican

It was a shock to everyone except himself and his wife Mandy. The gastropub, situated on two floors in the heart of Athlone, had been thriving several years ago. Before Covid-19 he was doing between 300 and 400 main courses every Thursday, Friday and Saturday. After Covid, the pub remained popular, but he noticed more people were working from home and the lunch trade was not what it used to be.

Ostensibly the pub looked like it was a viable concern, but Kelly felt more like the swan that seemed to glide across the lake while his feet pedalled furiously underneath the water. Two principal factors drove him to close a pub he had by then run successfully for 13 years – staff shortages and costs.

“The trade was still there, but it was the costs of everything – produce, a massive increase in wages because of Covid-19 and the cost of energy too, particularly electric and gas,” he says.

He estimates his energy costs went up by 50 per cent in the space of the year. Those were the headline figures everybody could identify with, but there were also other escalating costs too, vegetable oil, mayonnaise, tomato sauce – even just the basics. “Each week we were getting new prices from suppliers, they were doubling and tripling in price.”

Kelly says he was faced with two choices – either pass the increases on to his customers, who had their own difficulties with the cost-of-living crisis since the invasion of Ukraine, or close.

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He chose to shut, with great reluctance. “My wife and I put the figures together and sat down with our accountant. We did the forecast and said that if we carried on for another six months we would be crucified. We’ll end up owing the banks money.

“I was getting great support from the town. The custom was there, but I couldn’t keep it going.”

At the time of closure, his head chef and sous chef were working 12 hours a day because he was unable to hire a third chef – a common refrain from establishments serving food around the country.

There was a “Dutch auction” for staff post-Covid, he recalls, and competitors within the town were offering higher wages than he could offer. “Covid-19 finished a lot of pubs. We were doing fine up until Covid. Everything was working great,” he said.

Kelly is surprised by the figure of 457 pubs that have closed since the end of 2019, but not in a way that others are surprised. He thought the number of closures would be a lot higher given the perfect storm which has enveloped the hospitality industry since March 2020.

How so many pubs keep going is a mystery, he says. “I’m still on good terms with a lot of publicans around town and they will all tell you the same. They are either struggling with rent or energy costs, and now the problem is getting staff.

“A lot of the bar and floor staff have gone elsewhere. They have gone for either easier hours or less difficult jobs. With the hours that are in hospitality, they are all backing out of it now. It is not the same.”

The DIGI report emphasised the cultural and social importance of pubs in Irish society.

The price of a pint has gone up by €1.50 to €2 in places since the Covid-19 thing. We have never seen increases like that before

—  PJ Kelly, former publican

When a pub shuts, it’s not just another business that goes to the wall. It brings with it a unique clientele and ambience that cannot be replicated elsewhere.

Despite all the stresses and strains that went with running their pub, Kelly says he and his family miss it. “We still haven’t got over it,” he says. “All our family were involved in it and all the staff and we had built a great relationship with them. We were friends, but we don’t see each other any more.

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“There is a lot of friendships lost. It is like it is its own little community. We had people coming in every day, not necessarily for beer, but for a coffee, for a chat. It’s not the same any more. We don’t bother going for drinks any more.”

DIGI has called on the Government to reduce the excise duties on alcohol to help the sector, but price is only one factor driving the continuing closure of pubs.

“The price of a pint has gone up by €1.50 to €2 in places since the Covid-19 thing. We have never seen increases like that before. You are telling your partner that you are spending that kind of money, taxis have got more expensive, it is too expensive to go out and enjoy yourself,” says Kelly.

“That leaves you with the only option, which is to drink at home – which to me is dangerous because there is no control over it.”

Opening an off-licence to cater for those drinking at home wasn’t an option, he adds. The margins weren’t there, as the supermarkets will always undercut the smaller supplier.

Murphy’s Law has now reopened under new management, called The Stairwell. Kelly wishes his successors well. He now drives tourists around the country for a living. It’s not as much fun, but “at least those bills are not coming in as they used to”.