A recent survey, conducted by Bionic, an expert comparison site for SMES, encompassed 500 SME owners and included those in retail and hospitality sectors.
Major concerns
The survey highlighted key major challenges anticipated for business owners in 2025, particularly following the reduction of business rates relief to 40% on April 1st.
According to the findings, 30% of hospitality business owners identify the reduction of business rates relief as a major concern.
Bionic senior content manager Les Roberts said: “The retail, leisure, and hospitality sector will need to contend with the decrease in business rates relief.”
“Then there’s the higher national insurance contributions (NICs) to contend with. Many business owners will feel they came away from that Budget shouldering the biggest burden”.
The survey served as a reminder of the current financial fragility of the sector, with 44% of hospitality business owners expressing doubt about their business surviving the year.
To cope with mounting pressures in 2024, more than half of hospitality business owners reported increasing their product prices/rates to cut costs. Furthermore, just under half (48%) of business owners in the hospitality industry also said they were impacted by late payments in 2024.
Burn out and hiring challenges
Looking ahead to 2025, two in five of the business owners in the hospitality sector anticipated hiring & retaining talent will be a significant challenge. Adding to these operational difficulties, 78% of hospitality business owners also reported feeling burnt out to some extent in 2024.
The combined impact of these challenges has led to pessimistic outlooks within the industry.
Small Business Editor Laura Court- Jones expressed concern. She said: “It’s saddening but not surprising that 44% of hospitality businesses think they’ll cease trading in the next 12 months.”
“Hospitality businesses have had it tough for years since the pandemic and with reduced business rates relief and the employers’ national insurance hike kicking in from April 6, 2025, these businesses are going to feel the squeeze even more.”
Questioning the longevity of independent restaurants, she added: “Are we heading into the collapse of our independent restaurant economy? In 12 months, we may see very different UK high streets - we really don’t need any more Costas”.
While Labour’s promise of permanently reducing business rates in 2026-2027 offers a glimmer of potential future relief, Roberts cautioned: “this could take a long time to roll out and this promise may not even come to fruition”.
