Hospitality ‘under great strain’ despite inflation fall

18-Jan-2023 - Last updated on 18-Jan-2023 at 11:02 GMT

Inflation drop tempered: brewers and pub are still going through very tough times (credit: Getty/andresr)

Related tags Finance Pubco + head office Beer Legislation

Trade bodies UKHospitality and the British Beer & Pub Association have lamented the sector’s position despite a marginal drop in inflation.

Inflation has fallen to 10.5% in December from 10.7% in the previous month but surging prices at hospitality sites have been a factor in preventing a greater decline, according to The Office for National Statistics (ONS).

UKHospitality chief executive Kate Nicholls said: “Despite a slight easing in the rate of inflation, the prices of energy, food, drink and labour remains incredibly high and continues to put hospitality under great strain.

“If the Government wants this small downward trend to fall further, it needs to focus on reducing hospitality costs of doing business, giving venues the headroom they need to increase trade, create economic growth and drive counter inflation.”

Tough for brewers and pubs

Meanwhile, Emma McClarkin, chief executive of the British Beer & Pub Association, said: “Despite a slight drop in inflation our brewers and pubs are still experiencing an incredibly tough trading environment. Costs are much higher than previous years and our industry has been operating under duress for months on end as a result.

“While December did deliver a small boost to our industry, profit is still nowhere near pre-pandemic levels because of extortionate costs on everything across entire supply chains.

“Businesses are between a rock and a hard place, they need to cover their costs but the last thing they want to do is push up prices for loyal customers.

“Add to this the recent announcement that energy support for businesses would be greatly reduced and more rail strikes in February and there seems to be no end to the challenges our pubs and brewers continue to face.

“We need the Chancellor to deliver long-term interventions for our sector in his Spring Budget to help us focus on growth and investment instead of just holding on from one crisis to the next.”

Fuel prices down

ONS stated the easing in the annual inflation rate in December 2022 principally reflected price changes in the transport division, particularly for motor fuels.

It added there were also downward effects from clothing and footwear, and recreation and culture but the largest, partially offsetting, upward effects came from restaurants and hotels, and food and non-alcoholic beverages.

Inflation hit its peak in October 2022 when it was 11.1%. ONS said indicative modelled consumer price inflation estimates suggest the CPI rate would have last been higher than the October 2022 figure in 1981 (the CPI National Statistic series begins in January 1989).

It added the slowing in the CPI rate between November and December came as a result of CPI prices rising 0.4% in the month to December 2022, compared with a larger rise of 0.5% a year earlier.