UKH: 'inflation rise no surprise'
This comes as figures released yesterday (Wednesday 17 January) by the Office for National Statistics (ONS) revealed the headline rate of inflation increased to 4% in December 2023, up from 3.9% in November, with alcohol and tobacco prices cited as one of the biggest contributors to the uptick.
UKHospitality (UKH) chief executive Kate Nicholls stated the increase, which was the first time the headline rate had risen since February last year, came as “no surprise”.
No surprise
She said: “This rise in inflation, albeit slight, will come as no surprise to those of us that have been warning the endless rise in business costs risks an inflationary spike at the start of this year.
“With inflation having fallen steadily over the past year, the high business costs that remain a significant part of the economy risk reversing this downward trend.
“Hospitality is the highest contributor to the growth in the inflation rate this month and with business rates and the National Living Wage set to increase in April, hospitality venues will have no choice but to pass these costs onto consumers, once again fuelling inflation.”
In addition, the chief executive called for the Government to take “action” against rising costs for the sector before April, when business rates are set to increase.
Mitigate costs
Reacting to yesterday’s figures, British Beer & Pub Association chief executive Emma McClarkin also urged the Government to “address tax burdens” for hospitality firms while The Campaign for Real Ale (CAMRA) chairman Nik Antona said the inflation hike had brought the "issue of energy costs back into focus."
Nicholls added: “Businesses have absorbed costs as much as they can but with food inflation as well as wage costs continuing to rise and the impact of the cost of living being felt in customer demand, they can do so no longer.
“We need action to mitigate these cost increases. In the short-term, the Government should cap the business rates hike due in April. Looking to the years ahead, a reduced rate of VAT for hospitality will increase demand, grow sales and keep prices low.”
