Sector ‘more likely’ to axe two days’ trade than others

14-Nov-2022 - Last updated on 14-Nov-2022 at 10:40 GMT

Desperate situation: more than 1 in 20 sites expect to close for at least two days per week (credit: Getty/Pratchaya)

Related tags Finance Social responsibility Beer Food

Food and drink service businesses are more likely to cut their weekly trade by at least two days in November than any other industry in the UK, according to the Office for National Statistics (ONS).

The move was a reaction to rising energy costs that are putting most hospitality businesses on the verge of closure.

More than one in 20 businesses in the sector (6%) planned to stop trading for two or more additional days a week in the month, said the ONS, citing data from a Business Insights and Conditions Survey (BICS).

The same percentage of food and drink service businesses said they had already done so in the past three months, which was among the highest of any group. They were also the most likely to reduce trading hours, even if they were still operating for the same number of days (21%).

Energy is main concern

The food and drink service sector had the highest percentage of businesses (58%) saying energy prices were the main concern for November, up from 39% reported for October.

While, across the broader hospitality industry, 23% of businesses said energy prices were their principal concern for October, which was similar to November (22%). The most recent responses were collected after the UK Government pledged to subsidise businesses’ energy bills in September.

The hospitality sector as a whole was also the most likely to say that energy costs were making them consider raising their own prices in November.

41% expect to increase prices

Around 2 in 5 food and drink service businesses (41%) said they expected their prices to increase in November 2022, while the figure was 36% among accommodation businesses. That was compared to an overall average of 28%. Of those, around three quarters (76%) of food and drink service firms and 59% in accommodation said energy costs were making them consider the increases, compared to 34% across all industries.

When asked about turnover expectations for November 2022, 70% of accommodation businesses (currently trading) predicted lower turnover. That was the second-highest response of any business group and more than triple the average of 21%. For food and drink service businesses, it was more than double the figure across all industries, at 46%.

Across all industries, around 1 in 6 businesses (17%) expected their overall performance to drop in the next year, when asked in early October. More than 2 in 5 food and drinks service (45%) businesses expected performance to drop – more than any other group. That was followed by the accommodation sector, at 30%. However, both were less likely to predict falling performance than a month earlier.