'Petrifying' energy costs put sector on 'knife edge'
Licensee of the Spread Eagle in Homerton, Hackney, Luke McLoughlin said the pub’s energy bills had risen from 16p per kilowatt per hour to 30p and were expected to increase to 63p by September.
McLoughlin added: “We're getting to the point where it's going to be more expensive to put the lights on or turn the ovens on than paying rent, and we're in central London so our rents not inconsiderable.
“In the next 12 months, you're going to see a number of businesses decide to shut their doors because when you're paying £50,000 or £60,000 a year electricity, it's not worth it.
“When you make such slim margins as pubs do, and restaurants, spending thousands of pounds on electricity is scary, and it gets to the point where it's not operating.
Knife edge
“Electricity prices going from £700 per month a year ago to £3,000, which is probably what they are going to be in September, is absolutely petrifying.”
Additionally, earlier this week energy market research firm Cornwall Insight predicted the consumer price cap would exceed £4,200 by January 2023, while last week energy regulator OFGEM confirmed it would review the energy price cap quarterly as opposed to every six months.
This comes as recent data from Barclaycard revealed three in 10 (29%) consumers were already looking to spend less on days out, with 55% of that group planning to reduce spending in the on-trade.
McLoughlin said: “I don't know what they expect us to do, I know for a fact they don't want us putting prices up, but that's the only way we're going to manage.
“We’re on a knife edge, if we put prices up too much, people will stop coming.
Sustain businesses
“We read reviews and always see people say, ‘lovely meal’, or ‘nice staff’, ‘great décor’ but ‘very expensive’ and you think, it might be expensive, but it probably cost us money to have them come and eat with us if it was Monday to Thursday.”
Furthermore, the Government announced it would today (Thursday 11 August) be holding crisis talks with energy bosses, focusing on how energy companies could alleviate the pressure of sky-high bills.
It is understood Chancellor Nadhim Zahawi and Business Secretary Kwasi Kwarteng will ask energy executives to submit a breakdown of expected profits and pay-outs as well as investment plans for the next three years.
McLoughlin added: “If the energy companies are making all these profits, why on earth are we, not just businesses, but everybody, why are we paying so much money?
“I don't understand how the energy companies can keep getting away with it and I don't understand how the Government can expect people to sustain businesses without going bust.”
