BII: 'half of pubs operating at a loss'

By Rebecca Weller

- Last updated on GMT

Significant cost increases: only one in two pubs making a profit BII research has revealed
Significant cost increases: only one in two pubs making a profit BII research has revealed

Related tags Bii Finance Government

Only one in two hospitality firms are making a profit, new research from The British Institute of Innkeeping (BII) has revealed.

According to trading insights from its members, while two out of three respondents reported trading back to normal levels or seeing a rise in sales over the last year, just one in two were making a profit.

The data “highlights the severe impact of exceptional costs” on the sector over the last few years, the BII claimed, adding pubs had seen “significant cost increases” driven by high inflation across all areas of their business in addition to “inflated and unfair” energy prices.

BII CEO Steve Alton said: “Many long-standing, viable and diversified pub businesses are seeing strong sales simply not translate to profit. 

“This is holding back their ability to further grow their businesses through investment in their offer and their teams. 

Immense challenges 

“The exceptional short-term pressures will abate, and Government must now invest in these essential community businesses to allow them to weather current trading challenges.”

Ahead of next month’s Autumn Statement, the trade body has written to Chancellor Jeremy Hunt calling for further investment into hospitality firms.

The letter said: “Pubs have always been, and continue to be, an essential and unique part of our heritage, delivering flexible, accessible, skilled local employment and economic growth, as well as providing immeasurably important social connections and value in every community.

“Over the course of the last few years, they have faced immense challenges, firstly with the pandemic and then with huge energy price rises, unfair energy contracts, and high inflation against every cost in their businesses, from food and drink to staff wages.”

Vital lifeline 

In addition, the letter stated just one in three BII members had seen revenue growth over the last year.

Moreover, the BII CEO last week called for pubs to engage with their local MPs​ and write to them to support its #MyPub campaign, calling for rates relief to remain in place .

This comes as pubs from across the sector urged the Government to implement measures to support the industry​ following the recent increase to the National Living Wage.

Alton added: “Announcing an extension to the existing business rates support for at least another year will be a vital lifeline for many. 

“Also levelling the playing field for pub businesses through reducing unfair and disproportionate taxes, focusing on a specific VAT reduction for pubs and hospitality, will be key to unlock the full potential of our sector.”

Operators wishing to take part can visit the #MyPub campaign page on the BII website here​.

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