Thousands of pubs, restaurants and pubs across the UK are closing their doors for the final time as out-of-control ground rents, production costs and no-show bookings continue to wreak havoc on the industry.
There were more than 10 closures every day, according to industry data which revealed that the number of licensed premises in Britain fell by 3.6 per cent from 103,682 to 99,916 in the year to September.
This is the first time the total number has fallen below 100,000 in the history of research, according to the latest figures from the CGA.
The hospitality industry says it is collapsing under the combined pressures of rising energy, rent and food bills, staff shortages and no-show bookings, amid the ongoing cost of living crisis and the after-effects of Covid and Brexit.
said celebrity chef and restaurateur Tom Kerridge The Independent The hospitality sector is facing a “number of huge issues”, with his company losing more than £1 million since the outbreak of coronavirus.
Following Brexit, the TV chef said food inflation and staffing were major problems, with staff shortages pushing staffing costs to unaffordable rates. However, he said: “The biggest pressure, which has pushed people to the brink, is the cost of energy.”
Kerridge’s flagship restaurant, The Hand & Flowers, in Marlow, which is the UK’s only pub with two Michelin stars, received a 700 per cent increase in its service bills last year, he said.
These tensions have had a “huge impact” on his business, which includes seven restaurants and bars. He said it had lost more than £1 million since the start of the pandemic, plus double that in accounting losses it was currently trying to recover.
Martin McTague, national president of the Federation of Small Businesses (FSB), said: “Rising rents and input costs, coupled with inflation, rising energy prices and falling consumer demand, have squeezed the hospitality industry, to the point where more than half of small businesses in the sector are seeing a decline. In revenues, as well as confidence levels falling to record lows, rising staffing costs due to labor shortages, the rise in the National Living Wage and upcoming changes to pensions legislation are all adding to the burden.
Among the major sectors, hospitality companies had the lowest level of confidence, at -31.1 points for accommodation and food service activities, the Financial Stability Board’s Small Business Index for the third quarter of 2023 shows.
The organization’s research also shows that more than half (56%) of small hospitality businesses experienced a significant increase in operating costs – by more than 10% – in the past year.
Kerridge believes most restaurants, bars and pubs are just hoping to break even at the end of the year, warning that many independent venues will soon be forced to close. “It’s completely suffocating us,” he said. “The industry needs help, and fast.”
On the same day last week, two high-profile restaurants announced that they would close their doors due to high costs.
Simon Rimmer, 60, is a co-presenter at Channel 4 Sunday brunchHe described last Tuesday as a “heartbreaking day” as he confirmed the closure of his vegetarian restaurant Greens in West Didsbury, Manchester, 33 years after opening it with his friend Simon Connolly.
He posted a video on X, previously Twitter, explaining that the rent increase of about 35 percent, as well as the high costs of raw materials, heating, lighting, energy, hiring people and general food supplies, made the business unviable.
Tony Rudd, a MasterChef finalist in 2015, described how “sad” and “sad” he and his team felt when he similarly announced the closure of his restaurant Copper & Ink in London’s Blackheath on January 2.
In a video posted to
Jane Pendlebury, chief executive of the Hospitality Professionals Association (HOSPA), described the closure of so many hospitality businesses across the UK as “really disheartening”, blaming the ongoing financial pressures the industry finds itself under.
“High food prices, rising energy costs, and the inability to hire enough staff are all common features of the current hospitality landscape and, unfortunately, are forcing business owners to close their doors for good,” she said. “The ongoing cost of living crisis is not helping The UK only amplifies these issues, making it increasingly difficult for businesses to remain viable – while also having a significant impact on consumer spending habits. Complicating matters further is the significant impact of no-shows on bookings, posing a challenge. Large hospitality companies.
House of Commons Library research commissioned by the Liberal Democrats in December revealed that nearly 5,000 more hospitality and retail businesses closed their doors than those that opened during the first nine months of the year.
Sarah Olney, spokeswoman for the Treasury and Business, warned that the UK’s once-bustling high streets had turned into “ghost towns”.
I told The Independent: “Too many pubs, restaurants and cafes are closing for the last time due to high energy bills, borrowing costs and staff shortages. Our high streets have been turned into ghost towns because this Tory government has failed to listen to their concerns.
“Rather than risk further hospitality sector closures, ministers should give small businesses the support they need through business rates reform; tackling skills shortages and helping businesses trade internationally by reducing red tape and paperwork.
Kerridge criticized the government for prioritizing the wrong areas and channeling wasted money into “ridiculous” projects, while at the same time, industries such as hospitality are being “drained out” and “left behind”. He called on the government to reduce value-added tax rates by half from the current rate of 20 percent, and said: “This 10 percent rate [reduction would be a] A huge difference for businesses – this is the difference between staying open and staying open, or closing. “It’s a stress reliever.”
Pendlebury said HOSPA supports UKHospitality’s call for a VAT cut to help the industry keep prices low and recover. She urged an extension of the government’s business rates relief, which she said could help prevent a 7 per cent rise in bills in March. She also advised business owners to maximize their use of technology to increase automation.
McTague is calling on the government to look at recruitment costs in the round and help small employers through policies such as raising the recruitment allowance, as well as raising the VAT threshold to £100,000.
A government spokesman said: “In her autumn statement, the Chancellor announced more than £4 billion in support for small businesses and the hospitality sector, including a 75 per cent business rates relief and a freeze on alcohol duty rates.
“In 2021, we published the UK’s first Hospitality Strategy to improve the sector’s resilience and established a Hospitality Sector Council to oversee its implementation. We are working closely with the industry to address the challenges they face, and we will continue to help them grow and thrive in their local communities.”
The small business multiplier will be frozen at 49.9p for the fourth year in a row, they added.