Kate Nicholls told The Mail on Sunday the “toxic cocktail” of inflation, soaring energy costs and climbing rents meant many independent operators were handing in their keys and walking away.
She forecasted 20,000 of UKH members’ businesses were still operating below break-even and 30,000 had no cash reserves.
“I’ve never seen such a toxic cocktail of costs,” she added. “It is a perfect storm”. Indeed, operators have echoed Nicholls’ claims that rising energy costs pose a bigger threat to the sector than the pandemic.
Bath Pub Company managing director Joe Cussens told The Morning Advertiser he had seen exponential price increases across his four pubs, with one of the site’s electricity renewals predicted to rise from £29,000 a year to £60,000.
No help coming
Cussens said while the pandemic was “terrifying”, Government support meant the sector “quickly felt reassured”. The sector was now being hit by “horrendous” cost rises, but unlike the pandemic, there was no help coming.
This comes as the reduced rate of 12.5% VAT for pubs ended this month, rising to 20%, as well as national insurance and minimum wage contributions increasing and the cost-of-living crisis being at a 30 year high, posing the question of how much of these increases can be passed onto consumers before they stay out of pubs.
Tsunami of issues
Cussens added: “On top of the tsunami of other price rises, all of our suppliers building up their prices, we've got this massive increase in costs, with no help or support at all, or even words of encouragement from the Treasury, and at the same time, you've got customers who are feeling squeezed because of their energy prices.”
Pubs across the country have had to adopt creative strategies to cope with rising costs. This included swapping meant and fish for cheaper cuts, cutting down on portion sizes and negotiating with suppliers.
Marc Bridgen, owner of the Dog at Wingham commented: “In a nutshell, it's a nightmare. Every dish is under constant review, and we’re doing different styles of dishes we've not previously done.”
