The report which surveyed 600 pubs, sponsored by audit company KPMG, revealed that over 60% of outlets were being hit by increased rateable values, while 71% were being affected by increased utility costs.
Of the 85% of outlets that had received information on their new rateable value, 62% said it was to increase and by an average of approximately 14%.
Government legislation was also seen as a key challenge facing businesses, with concern about it being registered by 56% of respondents in 2015, rising to 67% in 2016 and climbing again to 73% in 2017.
The report revealed that remote countryside pubs under-performed the market, with more than 50% showing a decline during Christmas and New Year against 40% last year. This compared to a 44% decline overall.
Soft drinks and craft beer outperformed other drinks categories, with 75% of outlets reporting that soft drink sales were growing or remaining stable. Just over three quarters of those surveyed (76%) saw positive sales in craft beer compared to 63% in spirits.
In excess of half (52%) of outlets also reported a decline in beer sales, following a downward industry trend.
Despite the falling sales in beer, 64% of pubs expect sales to grow or remain stable in 2017. However, pubs in rural locations were less positive with this figure, falling to 46%.
Paul Waterson, chief executive of the SLTA, said: “The impact of recent drink-driving legislation, plus rates increases and minimum wage legislation makes trading in these areas even more challenging for retailers. This is reflected in our survey, where retailers highlighted Government legislation on drink-driving and changes to rateable values as the biggest macro-economic challenges facing their businesses.”
The report is the third review from the SLTA, which provides key insights on food and drink performance over the Christmas and New Year period.