The data from members of trade bodies UKHospitality, the British Institute of Innkeeping, the British Beer & Pub Association and Hospitality Ulster also found 73% had under six months’ of cash reserves.
Furthermore, it found more than half (58%) said they would have to reduce the number of staff they employ and/or hike prices if the Budget does not provide necessary business support while the number of hours available to staff has fallen by 8% on average, compared to last year.
Moreover, seven in 10 (70%) of respondents have increased prices since April, when an estimated £3.4bn worth of costs hit the sector and on average, prices have risen by 5% since the fourth month of the year.
In terms of Government support required, 61% of the trade bodies’ members cited a business rates discount as an action that would help their business while 54% said amending April’s changes to employer NICs with 84% citing a VAT cut.
Mounting pressures
A joint statement from the trade bodies said: “The situation facing our local pubs, neighbourhood restaurants and other hospitality venues is becoming increasingly perilous.
“Economic pressures are mounting at every turn and businesses have been forced to make tough decisions to cut jobs, reduce staff hours and put up prices.
“Many have already had to close the doors for the last time, leaving communities without the support local hospitality venues provide as a local hub.
“For those surviving, the situation is becoming more worrying. Cash flow is becoming a serious issue with three quarters of businesses with less than three months’ cash reserves.”
The organisations called for Government action at the upcoming Budget (Wednesday 26 November) around business rates, employer national insurance contributions (NICs) and VAT to help support the sector.
Urgent action call
The statement added: “Those with no cash reserves - a critical safety net - has reached a record high. This is an urgent situation that demands urgent action at the Budget.
“No one wants to see jobs and communities hit even further, but it’s clear they will once again be impacted if there is not adequate support for our sector at the Budget next week.
“Lower business rates, amendments to employer NICs and a cut to VAT are the measures that will deliver the relief and stability hospitality desperately needs.
“We urge the Chancellor to act next week, to protect cherished local venues, which support local jobs. economies and communities.”
