Page 7 - ATD09APRIL2016

U.S. NEWS A7
US Financial Front:
Neighborhood bars closing, but don’t count them out yet
JOYCE M. ROSENBERG
AP Business Writer
NEW YORK (AP) — Taps are
running dry and doors are
closing at neighborhood
bars across the country.
That has left the remaining
ones to try to find ways to
stay afloat.
One in six bars closed
between 2004 and 2014,
according to market
research firm Nielsen. More
than 600 close each month,
with just 334 opening.
The neighborhood bar
closures are happening as
more people are getting
their alcoholic drinks from
restaurants, cavernous
sports bars with scores
of TV screens, brewpubs
and at home. Besides the
increasing competition,
neighborhood bars also
are contending with other
challenges, including rising
costs for expenses such as
rent.
For instance, when the rent
doubled seven years ago at
Mumbles in New York City,
running a neighborhood
bar became more difficult
for owner David Feldman.
Online reservation and
order-taking services took
more bites out of his profits. beer with their meals. And
At the end of January, after
22 years, Mumbles closed.
“It’s getting harder
and harder. The bigger
corporate restaurants have
tons of money, that seems
to be the way things are
going,” says Feldman, who
still has two restaurants in
Manhattan, one of which
will now employ one of
Mumbles’ bartenders.
CHANGING HABITS
The number of
neighborhood bars has
declined as drinking habits
have changed, says Lester
Jones, chief economist
with the National Beer
Wholesalers Association, a
trade group. Tougher laws
on underage drinking and
drunk driving have cut into
consumption.
The growth of in-home pay
TV services has also had
an impact; when relatively
few homes had cable in
the early 1970s, sports fans
went to bars to see games
that weren’t on broadcast
TV. There were nearly 10
million cable subscribers
in 1975 and close to 100
million pay TV subscribers
last year, including cable,
satellite and telephone
company-delivered
services, according to
research firm SNL Kagan.
People don’t need the
corner bar.
When consumers do
go out, they have a
rapidly growing number
of choices. Restaurants
including national chains
have bars and advertise
their beverages as much
as their food.
They’re also the kind of
place where parents can
take their kids and have a
the chains are growing;
the number of Buffalo Wild
Wings locations has tripled
from 370 in 2005 to 1,136 by
the end of 2015.
HIGHER EXPENSES
Rising costs also have hurt
neighborhood bars.
Rent increases, in
particular, are typical
of areas that are trendy
or have high real estate
taxes. Urban areas where
residents have big incomes
have seen the largest
increases in rents for retail
Saturday 9 April 2016
Tess Collins poses behind the bar at her McGeary’s Irish Pub in Albany, N.Y. The number of
neighborhood bars across the country is shrinking as more people do their drinking in restaurants
and huge sports bars. But don’t count the neighborhood bar out, as many are still thriving because
of their own, special appeal.
(AP Photo/Mike Groll)
space, which includes bars, climbing at a higher pace, a regular after-work crowd
says Ryan McCullough, according to Cushman & and people visiting the
a senior economist with Wakefield, a real estate state capital on business.
CoStar Group, a real estate services company. Families show up on
information provider. Rents In addition to higher rent, weekends. There are seven
in those areas nationwide neighborhood bars have TVs in the main bar and
are up an average 9.4 to contend with other rising two in a back room, but
percent since the high costs. Collins finds her customers
they reached before the Larger companies with are more interested in
recession. multiple locations can talking to each other than
But in areas where demand buy beer, liquor and food watching a game.
for real estate is particularly at lower prices because “I have an awesome
high, rent increases can they get bigger discounts community here,” says
be substantially higher. — the New York State Collins, whose bar is nearby
Rents on a trendy stretch Liquor Authority mandates Recovery Sports Grill, a
of Broadway in Manhattan a 40 percent discount on sports bar and restaurant
not far from Mumbles purchases of 50 cases, that has 35 screens and
soared 42 percent between compared to 20 percent is part of an 11-location
the fall of 2014 and this past on five cases. A higher chain. “Everybody knows
fall, according to the Real minimum wage and rising each other.”
Estate Board of New York, a insurance costs also sap
trade group. profits, says Tess Collins, SMALL BARS FIGHT TO
Other cities see similar who runs McGeary’s in SURVIVE
increases: In Miami, retail downtown Albany, New Many owners have to pass
rents rose an average of York. on their higher costs to
nearly 33 percent from But Collins brightens as their customers, or look for
2011 to last year, with she talks about McGeary’s lower-priced food options
rates in the hottest areas customers. The bar draws for their menus.q