A survey by The Morning Advertiser (MA) showed more than 70% of operators did not expect to make it through the winter without Government intervention.
Over 65% said they’d seen their utility costs increase by over 100%, meanwhile 30% reported a jump of 200% and 8% reported increases of more than 500%. Nearly 80% of operators said they could not afford the increase in energy costs.
Desperate operators are calling for a range of measures to help them survive the crisis, from reductions in VAT and business rates through to a cap on energy prices for business.
Responding to the survey, one operator said: “Proper support and intervention is needed by [the] Government. Even a 20% increase will be unaffordable, never mind 200%.”
Another added: “Action needs to be taken now to protect businesses. It was hard enough making it through covid times, this is now absolutely ridiculous.”
“We need lower prices,” said another desperate operator. “We were in a fixed contract at 14p a unit, just been quoted 83p a unit. I’m a small wet-led pub, I have no chance of surviving.”
"The Government needs to support small businesses to retain employment like they did during the pandemic. Without support now all those grants and furlough payments are wasted."
One other simply said: “Help.”
Extinction event
Ed Bedington, editor of the MA said: “This crisis is being described as an “extinction event” for hospitality and that’s no exaggeration. Increases of the kind we’re seeing are totally untenable and need to be addressed now, not in a few weeks time when the Conservatives pick a new leader.
“Businesses are already struggling to recover from the strains put on them by the pandemic and the many lockdowns. As the results of our survey show, the outrageous increases will be the final straw for many businesses.”
Heath Ball, managing director of The Frisco Group which operates three pubs across the south east of England, added: “This energy bill crisis not only comes on the back of the most testing of times as businesses try and recover from the Covid crisis, but I think it poses an even greater threat to the survival of pubs. Brits face the prospect of losing thousands of pubs if something isn’t done soon to help.”
He sent a stark warning to the Government: “Find a solution to this now or face mass pub and restaurant closures. Once again the hospitality sector seems to be underrepresented in the corridors of power, maybe because they think we’re a robust industry, and they are right, but this is now a doomsday scenario. To see the business secretary trying to put consumers' minds at rest saying that help is coming is great, but perhaps his focus should be on the businesses on the brink of closure – the clue is in Mr Kwarteng’s job title.”
While many operators are facing massive hikes in prices for their power costs, others are also even finding it difficult to get contracts for power in the first place, Ball added: “Talking to other operators, they aren’t even being offered new energy contracts at any price due to the sector / operation being deemed “high risk”. So they can’t even get power even if they can afford it, what a shambles.”