No sign of 'let up' as inflation exceeds 10%
Industry leaders have called on the Government to implement a “long-term future strategy” for the sector, including an energy cap for small businesses, as rising costs potentially pose a bigger threat to hospitality than the pandemic.
British Beer & Pub Association (BBPA) chief executive Emma McClarkin OBE said: “Our pubs and brewers are experiencing the impact of soaring inflation first hand.
Future strategy
“Costs have been rising on everything for months with no signs of a let up. Summer would usually be a booming time for business in our industry, but it’s been seriously dampened by a cost of doing business crisis sparked by rising inflation.
“Publicans are between a rock and a hard place, they need to cover their costs, but they also have customers who are tightening their belts, it’s completely unsustainable.
“It’s not an exaggeration to say what we are facing in terms of rising costs could have a worse impact than the pandemic in terms of business closures.
“We urgently need the Government to step in and implement an energy cap for small businesses and think about a long-term future strategy for our sector before even more businesses are forced to close their doors.”
This comes as figures from the Office for National Statistics (ONS), released yesterday (Wednesday 17 August), revealed inflation rocketed to 10.1% in the 12 months to July, having increased from 9.4% in June, with food prices having made the largest upward contribution to inflation rates between June and July 2022.
Additional pressure
Additionally, a recent report from the Night-Time Industries Association (NTIA) showed almost half (48%) of businesses in the sector were barely breaking-even, with one in five firms at risk of not surviving the next 12 months.
UKHospitality (UKH) chief executive Kate Nicholls said: “With inflation rising faster than wages, additional pressure is now being exerted on consumer confidence, meaning discretionary spend is further squeezed as people think twice about visiting hospitality venues, choosing instead to keep what money they have in their pockets.
“We’re urging the Government to act now, and apply the brakes to skyrocketing energy costs, which are the main driver of inflation. Because if they don’t get help soon, hundreds of hospitality businesses face going to the wall, resulting in thousands of job losses that will hasten the looming recession.”
