Thousands of bars, restaurants and pubs across the UK are closing their doors for the last time as out-of-control rents, production costs and no-show bookings continue to plague the industry.
There are more than 10 closures a day, according to industry data which shows the number of licensed premises in England fell by 3.6% from 103,682 to 99,916 in the year to September.
This is the first time the total has fallen below 100,000 in the study’s history, according to the latest figures from consultancy group CGA.
The hotel industry says it is collapsing under the collective pressure of soaring energy bills, rent and food bills, staff shortages and no-show bookings, amid a cost-of-living crisis ongoing and the consequences of Covid and Brexit.
Famous chef and restaurateur Tom Kerridge recounts Independence The hospitality sector is facing “some big problems”, with his business losing more than £1 million since Covid hit.
After Brexit, the TV chef said food inflation and staffing were both major problems, with staff shortages pushing employment costs to unacceptable levels. But, he said, “The biggest pressure that puts people on edge is energy costs.”
Kerridge’s flagship restaurant, The Hand & Flowers, in Marlow, the only pub in the UK with two Michelin stars, reportedly had a 700 per cent increase in utility bills last year, he said.
These tensions have had a “huge impact” on his business, which includes seven restaurants and pubs. The company has lost more than £1 million since the pandemic began, he said, adding up to double the amount of accounting losses it is now trying to make back.
Martin McTague, national chairman of the Federation of Small Businesses (FSB), said: “Rising rents and input costs, along with inflation, high energy prices and low consumer demand have is devastating the hospitality industry, to the point that more than half of small businesses in the sector are facing falling revenues and lowest levels of reliability. Soaring employment costs due to labor shortages, increases in the national living wage and upcoming changes to pensions law all add to the burden.”
Among the main sectors, hospitality businesses have the lowest confidence level, at -31.1 points for accommodation and food services, FSB Q3 2023 small business index shows.
The organisation’s research further shows that more than half (56%) of small hospitality businesses have faced a significant increase in operating costs – more than 10% – in the last year.
Kerridge believes that most restaurants, bars and pubs are only hoping to break even by the end of the year, and warns that many independent venues will soon be forced to close. “It absolutely took our breath away,” he said. “This industry needs help quickly.”
On the same day last week, two high-end restaurants announced they would close due to rising costs.
Simon Rimmer, 60, co-presenter on Channel 4 Sunday lunchcalled last Tuesday a “heartbreaking day” as he confirmed the closure of his vegetarian restaurant Greens in West Didsbury, Manchester, 33 years after he opened it with friend Simon Connolly.
He posted a video to Twitter/X, explaining that a roughly 35% increase in rent as well as the skyrocketing costs of raw materials, heat, lighting, electricity, labor recruitment, and food in general have caused business cannot exist.
Tony Rodd, one person Super chef The 2015 finalist, described how “devastated” and “heartbreaking” he and his team were when he announced the closure of his Copper & Ink restaurant in Blackheath, London on 2 May. first.
In a video posted to Twitter/X, Rodd also predicted the closure of more independent restaurants in the near future, as the hotel industry struggles under the combined impact of Covid, Brexit, and the cost of living crisis. and energy bills skyrocketed.
Jane Pendlebury, chief executive of the Hospitality Professionals Association (Hospa), described the closure of many hospitality businesses across the UK as “truly disappointing”, blaming financial strain on It is the constant that this industry is suffering from.
She said: “Soaring food prices, rising energy costs and an inability to recruit enough staff are common features of the current hospitality landscape and are, unfortunately, forcing business owners to close their doors. permanent door. The UK’s ongoing cost of living crisis is only exacerbating these problems, making it increasingly difficult for businesses to remain viable – while also having a huge impact on people’s spending habits. consumption. Further complicating matters is the significant impact of no-shows on bookings, posing a significant challenge for hospitality businesses.”
House of Commons Library research commissioned by the Liberal Democrats revealed in December that almost 5,000 more retail and hospitality businesses had closed than those that were open in the first nine months of the year.
Sarah Olney, the party’s business and Treasury spokeswoman, warned that Britain’s once bustling motorways are being turned into “ghost towns”.
She told Independence: “Too many pubs, restaurants and cafes are closing their doors for the last time due to rising energy bills, borrowing costs and staff shortages. Our high streets are being turned into ghost towns because this Conservative government is not listening to their concerns.
“Rather than risk more hotel closures, ministers should give small businesses the boost they need by reforming business rates; Addressing skills shortages and helping businesses trade internationally by cutting bureaucracy and paperwork.”
Kerridge criticized the government for prioritizing the wrong sectors and wasting money on “ridiculous” projects, while industries such as hotels were being “drained” and “left behind”. Calling on the government to halve VAT from the current 20%, he said: “That 10%. [reduction would be a] big difference for businesses – it’s the difference between surviving and staying open or going out of business. It’s a release of pressure.”
Pendlebury said Hospa is backing UKHospitality’s call for a VAT cut to help the industry keep prices low and bounce back. She called for an extension to the government-imposed business rates relief policy, which she said could have helped prevent a 7% rise in bills in March. She also advised business owners to maximize Use technology to increase automation.
Mr McTague is calling on the government to look at employment costs this round and help small employers through policies such as increasing employment allowance as well as raising the VAT threshold to £100,000.
A government spokesman said: “At the autumn statement, the chancellor announced more than £4bn of support for small businesses and the hospitality sector, including a 75% reduction in business rates and freeze alcohol tax rates.
“In 2021, we published the UK’s first hospitality strategy to improve the industry’s resilience and established a hospitality industry council to oversee its implementation. We are working closely with the industry to address the challenges it faces and we will continue to help them grow and prosper in their local communities.”
It added that the small business multiplier will be frozen at 49.9p for the fourth year in a row.