One-in-three operators struggling to break even post-lockdown

It comes as operators have said ‘the new normal’ of trading and Covid-secure guidelines poses challenges for the viability of their businesses. 

A quarter of brewing and pub sector businesses (25%) said they didn’t feel their business was sustainable beyond the end of March 2021 at present, when asked by the BBPA.

City-centre venues have suffered from reduced footfall as many office workers continue to work from home, the trade association said.

What’s more, a survey for High Speed Training found that 78% of Brits​ have still not gone out to eat since hospitality sites opened.

The publication of the BBPA’s survey follows a similar membership survey from the British Institute of Innkeeping (BII), in which six in ten reopened businesses said they were not making a profit at present.​

The BBPA called for beer duty to be slashed by 25%, VAT to be cut on beer served in pubs and a fundamental reform of the business rates system.

Although a VAT reduction and the Government’s Eat Out to Help Out discount meals initiative are welcomed, additional long-term support is needed by operators, the body said. This is especially needed for smaller, wet-led pubs that are less likely to benefit from the existing food-focused schemes. 

Lower confidence

Emma McClarkin, BBPA chief executive, said: “One month after they were able to reopen in England, over a third of pubs are struggling to break even or turn a profit. This is inevitably due to lower consumer confidence and reduced capacity for pubs.

“£1 in every £3 spent in a pub goes to the taxman and now is the time to reinvest that money in our brewers and pubs. That means cutting beer duty by 25%, as well as making the VAT cut permanent and extending it to beer in pubs to bring the cost of a pint down and unlock investment. 

“Fundamental reform is also needed of the business rates system – pubs pay 2.8% of the business rates bill, despite accounting for just 0.5% of turnover.”

McClarkin also called on the Government to boost customer confidence and assure them that visiting pubs was safe to do. She said “consistent and positive messages” were needed.

She added: “Our sector is a resilient one, and 75% of brewing and pub businesses say they are sustainable at present, but that still leaves 25% that are struggling and it would be catastrophic for our culture and economy if they are denied the support they need. 

“Now is the time to recognise and invest in our pubs and brewers to secure them for future generations and to enable growth.”