Sector needs 'urgent clarity' to 'bounce back'

This comes as inflation rose by 10.7% in the 12 months to November 2022, according to the latest data from the Office For National Statistics (ONS).

While this was down from 11.1% in October, rising prices in pubs, restaurants and cafes made the largest upward contribution to inflation during this period.

UKHospitality chief executive Kate Nicholls said: “While the headline rate of inflation has reduced slightly, it remains the case hospitality businesses are seeing intense inflation in every aspect of their operations. 

Businesses survival 

“These levels of inflation will not disappear overnight and businesses are doing everything they can to keep costs down, but they need certainty on the future of the Government’s energy support scheme beyond March.

"It’s crucial the sector is included in future energy support to help businesses survive and ensure they can keep prices down for customers.”

According to the ONS data, the Consumer Price Index (CPI) rose 0.4% on a monthly basis in November this year, compared with a 0.7% increase during the same period in 2021.

Fuel prices made the largest downward contribution to inflation last month, having risen by 17.2% compared with 22.2% in October.

However, this was partially offset by the upward contributions in hospitality settings, which mainly came from price increases to alcohol served in restaurants, cafes and pubs, particularly for whisky, wine and gin, according to ONS.

Urgent clarity 

Furthermore, the data showed food and non-alcoholic beverage prices rose by 16.5% compared with 16.4% in October, with the annual rate of inflation for this category having risen for 16 consecutive months, indicating it had not been this high since September 1977, when it was estimated to be 17.6%.

This follows the latest CGA Coffer Business Tracker, which revealed despite sales in managed groups being 3.7% up in November compared with the same period in 2021, inflation had continued to hold trade down in real terms.

Nicholls added: “We have no doubt the next year will be very tough for hospitality businesses.

“With bills continuing to rise and support due to end in March, we need urgent clarity from the Government on measures to help the hospitality sector bounce back in 2023.”

“While the headline rate of inflation has reduced slightly, it remains the case that hospitality businesses are seeing intense inflation in every aspect of their operations. In particular, energy, food and drink costs continue to rise and will be taking up a significant proportion of business spend.

“These levels of inflation will not disappear overnight and businesses are doing everything they can to keep costs down, but they need certainty on the future of the Government’s energy support scheme beyond March. It’s crucial that the hospitality sector is included in future energy support to help businesses survive and ensure they can keep prices down for customers.”