Neighborhood bars closing, but don't count them out yet

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.

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.

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.

Urban areas where residents have big incomes have seen the largest increases in rents for retail space, which includes bars, says Ryan McCullough, a senior economist with CoStar Group, a real estate information provider.

In Miami, retail rents rose an average of nearly 33 percent from 2011 to last year, with rates in the hottest areas climbing at a higher pace, according to Cushman & Wakefield, a real estate services company.

Larger companies with multiple locations can buy beer, liquor and food at lower prices because they get bigger discounts — the New York State Liquor Authority mandates a 40 percent discount on purchases of 50 cases, compared to 20 percent on five cases.

[...] he says smaller bars offer something more intimate than the bigger guys can serve — what he calls a neighborhood feel.

"On any day, you can come in here, and there are tables with construction workers, maybe two prominent judges and a couple of people from the banking industry, all walks of life," Drake says.