The sector is one of the UK’s largest employers, accounting for about one in every 10 jobs and supporting 3.5m people across the country.
The sector underpins both domestic and inbound tourism and has, over the past five years, demonstrated remarkable resilience, agility and adaptability.
Despite the industry overcoming challenge after challenge, support from the Government, for both independent and corporate operators, needs to continue.
While Eat Out To Help Out, the furlough scheme, business rates relief and VAT reduction supported many businesses throughout the pandemic, the sector needs ongoing support to counter rising costs and continue its key role in our economy.
Community lifeline
Hospitality is far more than just a place to eat or drink. It serves as a lifeline in both urban and rural communities. It offers flexible employment opportunities that fit around family life or supplement income. It provides a vital social outlet for those experiencing loneliness and supports local services by offering space for community groups and events.
The maths is simple: when household bills and taxes rise, disposable income shrinks and hospitality visits decline. While inflation has eased slightly, it remains a burden, compounded by increased employer national insurance contributions and rising energy costs. We all know the pub is the ‘hub’ but without meaningful support, the industry will continue to face mounting pressures.
In my 26 years at Christie & Co, specialising in the acquisition and sale of pub companies and large portfolios, I’ve seen pubs deemed unviable or underperforming sold for alternative uses – converted into convenience stores, residential units, quick-service restaurants, offices and nurseries.
However, our recent Pubs & Restaurants Market Review revealed that over 86% of the pubs we sold in the first half of this year remained in pub use, which clearly shows there is still strong demand and appetite among operators to enter or expand within the sector.
Increasing strain
Pubs continue to play a vital role in communities across the UK but the industry needs targeted support.
Whether through the long-debated reduction in VAT for hospitality businesses, accelerating business rates reform, or reinstating the 70% rates relief, these are not new ideas. Yet the cracks in the sector, masked over the past five years, are now beginning to show. Turnover may be up, but for many profits are down, placing increasing strain on operators.
The closure, or even the threat of closure, of a pub can have a ripple effect on staff, their families and the local supply chain. We’ve seen similar consequences in other sectors, such as the recent cyber attack on Jaguar Land Rover, where the impact extended far beyond the company itself to local shops, taxi drivers and service providers.
Despite the sector’s enduring resilience, support is needed, and as we all look ahead to the Autumn Budget on Wednesday 26 November, it is hoped that measures will help address these pressures and provide support to hospitality businesses across the UK.
