Sector 'feeling the brunt' of inflation
Figures released by the Office for National Statistics (ONS) on Wednesday 14 February revealed the headline rate of inflation rose to 4% in the 12-months to January 2024, the same as December 2023.
While food prices made one of the largest downward contributions to inflation, down one percentage point between December 2023 and January 2024, gas and electricity costs were 89% higher than in January 2021.
Tsunami of costs
UKH chief executive Kate Nicholls said: “The rate of inflation not increasing, as widely expected, is positive but let’s not forget that this still means prices are continuing to rise.
“Hospitality businesses are continuing to feel the brunt of these costs, with food, drink and energy all continuing to rise at a rapid rate.”
Moreover, Nicholls warned venues would once again be hit by a “tsunami of additional costs” in April, when business rates are set to increase by 6.7% on top of a rise in the National Living Wage.
This comes as data from Fourth earlier this month showed venues had already increased prices by 7.1% to combat rising costs and staff shortages, with trade in pubs having seen a 6.1% downturn in the year to November 2023.
In addition, the cost of a pint of draught lager also soared by 10.8% in the year to January 2024, the biggest annual January uptick since 2019.
Inflationary spike
Nicholls also called for the Government to “take action” in next month’s Spring Statement, after recently telling The Morning Advertiser the cost of doing business was “too high”.
She added: “Unfortunately, the vast majority of businesses have absorbed all they can and are now forced to pass these onto consumers.
“If the Government wants to avoid the risk of an inflationary spike in April and the following months, it should take action at the Budget to cap business rates increases and reduce the rate of VAT for hospitality.”
