The Consumer Prices Index (CPI) rose by 3% in the 12 months to January 2025, up from 2.5% in the 12 months to December 2024, the latest estimates from the Office for National Statistics (ONS) showed.
Following January’s rise in inflation, operators have shared their fears of economic instability.
The Morning Advertiser (The MA) spoke to operators to find out more about their concerns around rising cost prices, and understand how they have adapted to the current climate.
Phoenix Arts Club, an independent venue in London’s West End has particularly struggled amid inflation increases.
Managing director Peter Dunbar voiced his concerns around the impact of inflation rates on his business, staff, and customers.
He said: “As we’re one of the last independents in our area of London’s West End, any sign of economic turbulence, especially on inflation, causes serious worry for our operation, our staff and customers.
“We simply can’t charge any more for a pint of beer or a glass of wine. Our regulars have voiced that they can’t afford it”.
“We may have to close for good”
Peter Dunbar
Dunbar emphasised the heavy impact these rises are having on his employees, many of whom continue to struggle with the cost of living, despite earning London living wage and service charge.
He admitted he has also noticed a drop in late-night trade in the area and stressed the potential need to reduce staffing at the venue, or even close early due to cost increases.
Opening up costs
“I had a member of staff, a single parent, come to me almost in tears at their cost of living and their wage - and this is with us paying the London Living Wage and staff earning service charge on top and staff working in London’s supposedly ‘glittering West End’”, he said.
Touching on decreases in late-night trade, Dunbar added: “We’ve experienced significant drop-off in our late-night trade during the week and further rises to inflation, without any form of public support [like crowdfunding] means that our business is likely to be hit further.”
He explained he runs the risk of having to reduce his staffing pool and going forward, may have to consider closing the site completely in the early parts of the week.
“We just can’t justify our ‘opening up’ costs. And it’ll be the loyal regulars in our community who will then be left without a bar to drink in”.
At the beginning of 2025, Phoenix Art’s Club announced it’s Crowdfunder campaign.
The campaign was designed as a public appeal for help to give voices to struggling independent venues in the area, battling rising costs.
Dunbar said: “We decided to put the Crowdfunder together to act as a buffer for the year to come. Otherwise, we may just close for good”.
Owner of the Onslow Arms in Loxwood, West Sussex, Rob Barr similarly stressed the importance of a proactive and financially aware approach to navigate rising inflation.
“Staying close to your number and suppliers is more critical than ever at the moment!”
He said: “Staying close to your numbers and suppliers is more critical than ever at the moment! With consumer confidence low, just slapping an extra X% on top of current prices may see trade impacted further.”
Concerning rise
Expanding on how he plans to tackle this, Barr added: “We plan to navigate through this by having good conversations with suppliers. Looking at things like locking in prices with expected volumes.
“We are also looking at payment terms to increase cash in the business and low stock holdings to ensure waste is low. We also aim to stay close to the numbers and take action where needed.”
UKHospitality (UKH) chief executive Kate Nicholls described January’s inflation hike as a “warning”.
She said: “This a worrying jump in inflation and should act as a stark warning of what is to come if the Government persists with its plan to inflict £3.4bn of cost on hospitality businesses in April."
Food and beverage costs also continued to put pressure on the sector, with food costs rising 3.3% during the 12-month period.
The Consumer Price Index, which includes owner occupiers' housing costs (CPIH) has also jumped from 3.5% to 3.9%, marking the highest figure for 10 months.
RSM UK warned recently of the dangers of cost pressures partnered with fragile consumer confidence could threaten businesses viability this year.
Meanwhile, owner of Staffordshire’s Tamworth Brewing, George Greenaway, cautioned about the potential long-term consequences for the sector without Government intervention.
He said: “Rising inflation coupled with the potential 300% rise in rates will be the final nail in the coffin for the sector.
“These factors will absorb the little profit remaining and lead to the only solution left which will be to raise prices impacting inflation further. It’s a vicious cycle that the Government need to get a grip of.”
