Figures from UHY Hacker Young revealed the number of pub and bar business insolvencies during the 12-month period increased by 66%, from 438 in 2021/22 to 725 in 2022/23.
The accountancy firm attributed the upswing to a rise in costs across the board alongside a reduction in consumer spending amid the cost-of-living crisis as well as high interest rates and inflation.
UHY Hacker Young partner Peter Kubik said: “It is a worrying sign that so many pubs and bars are being forced to close their doors for good. Operators need to be busier than ever just to break even.
“The sharp rise in costs in the last eighteen months has been the final push into insolvency for many pub businesses, which were saddled with Covid era debts."
Draught beer prices increased by 9% between January 2023 and September 2023, from £4.23 to £4.62, driving customers away and impacting footfall for venues as they “struggle” to pass rising costs on, Hacker Young explained.
Moreover, 67% of adults were spending less on non-essential items, with 63% now seeing drinking alcohol as a luxury, an increase of 52% compared to 18-months ago.
Drop in revenue
This comes as the latest figures from the Office for National Statistics (ONS) revealed the average cost of a pint of lager in a pub had jumped 12.5% in the year to October, from £4.15 in 2022 to £4.67.
Industry leaders also expressed “deep concern” earlier this month as the Bank of England announced interest rates would remain at 5.25% in a bid to reduce the headline rate to inflation, which stood at 6.7% as of September.
Kubik added: “After enduring a huge drop in revenue during the pandemic, pub and bar companies are desperate to turn a profit. Instead, as we run up to the festive period, high inflation and interest rates is making this impossible for many owners.”