This comes as figures released by the Office For National Statistics (ONS) today (Wednesday 15 February) showed inflation rose by 10.1% in the 12 months to January 2023, down from 10.5% last month.
Nicholls said: “The rate of inflation decreasing for three months in a row is promising but it remains the case price rises continue to significantly hinder hospitality businesses.
Stay afloat
“A drop in the cost of visiting venues in January is a clear reflection of venues squeezing every drop out of their margins in a bid to attract custom, in order to stay afloat after a Christmas hit by rail strikes and amid the annual New Year drop in consumer spend.”
Rising prices in alcoholic beverages largely contributed to the increase in inflation rates, partially offsetting the downward influences made by fuel costs, one of the main drivers of the lower inflation rate.
While overall food inflation saw a slight decrease in the year to January, dropping from 16.8% in December to 16.7%, food costs remained one of the contributors to increasing inflation.
Furthermore, overall energy prices as per the Consumer Price Index including owner occupiers’ housing costs saw increases of 50.7%, down from 52.3% in the year to December 2022.
Cliff edge
Nicholls added: “The cost of energy alone is enough to keep much of the sector teetering at the cliff edge.
“The substantial reduction in energy support in April, as well as continued labour shortages, will increase the sector’s vulnerability, constrain growth and likely add to further price rises.
“This can be avoided if the Chancellors takes action at the Budget, to tackle the root causes of inflation in hospitality, allowing the sector to help reduce inflation.
“Intervening in the energy market, reforming the Apprenticeship Levy and introducing a lower business rates multiplier for the sector are all measures that can see the sector tackle immediate challenges and rapidly deliver economic growth for the UK.”
