“Costs back end are incredibly expensive across the board,” Kerridge told The Morning Advertiser’s sister publication MCA.
“There are normally places to hide, where certain costs go up, and you can try to find an alternative or a different route into business or try and make savings but there is nowhere to hide at the minute.
“Every single cost is coming in across the board from utility bills, staff wages, to food inflation and even cleaning products, logistics, and repairs.”
The owner of two Michelin-starred pub, the Hand and Flowers, highlights the dire financial squeeze that is gripping both businesses and consumers alike.
“More and more people have less disposable income,” he added.
“Their wages haven’t gone down, but in real terms they have because their costs are also incredibly high so it does make it quite a difficult space to be.”
Despite headlines suggesting a summer pub resurgence, he says the situation is not improving. “It’s not easing at all. We hear about pubs closing all the time, and they’re continuing to close.
“This isn’t a short-term solution that suddenly, the sun’s out and everyone’s in a good mood. Pubs still have monthly bills, you have monthly pay runs, and quarterly VAT runs. It’s not to say, the sun is out and everything’s OK; it’s very, very difficult.
“Most businesses will be trying to operate at a break-even point to see if they can get through and survive until there’s greener shoots or promises of things getting better. Or they are working out the losses they can take over the next couple of years before they can start turning it around.”
Need for governmental intervention
Kerridge is vocal about the need for substantial governmental intervention to aid the industry. “There’s so much that we want to achieve in terms of a new Government, a new forward-thinking plan.
“The long-term goal would be to have a reduction in VAT, and that would be something that would be massive for the hospitality industry to bring it in line with Europe.”
He laments the lack of action from previous decision-makers and remains hopeful for future changes, despite economic constraints. “It is something that we’ve been asking as an industry for a long time, and it fell on deaf ears with the previous Government.
“We’re hoping maybe this one will pay a bit more attention. However, with such a shortfall in Government funding, the idea of them dropping 10% off VAT in hospitality is unlikely to happen short term. But it doesn’t mean to say that we can’t keep pushing for it in the long term.”
Kerridge believes reducing VAT could have a significant positive impact. “So much of that 10% revenue that comes back into the business can be used as increased wages, so we can pay proper professional full-time wages for people who are seeking it out as a profession. But also reinvestment in things like staff training and apprenticeship schemes.”
Despite being a proponent of fair wages, Kerridge acknowledged the complexity of balancing this with the financial realities of running a business.
He said: “There is a fear of minimum wage going up again. I’m a firm believer that our industry is built on its workforce, and our workforce being able to get to work, being able to be seen by the NHS, having a transportation system or an education system that works for their kids.
“So, I’m a firm believer in a workforce being the priority, but then at the same point, there has to be an understanding that business needs to operate and hospitality is very different to so many spaces.”
It is clear that Kerridge is also passionate about a more holistic approach to improving the perception of hospitality as a viable and respected career path.
“I would like to see some form of national campaign of understanding that as a skillset, hospitality is amazing and, as an industry, it is something that people should really get behind. It is full of incredibly wonderful, passionate, professional people.”
Complete professionals
He draws comparisons to the respect afforded to hospitality professionals in other countries. “People who work in hospitality in France, Germany or Italy are seen as complete professionals. When we go there on holiday, we see them as professional people. There’s just something funny in this country that we don’t always seem to. It is a proper job to those of us who absolutely love, and work very hard at it.”
“We need a mindset change, and that isn’t something that happens overnight. It’s something that we need to turn around slowly but surely and drive it forward as an exciting, creative, and passionate profession.
Supporting and championing the best of great British pubs, Kerridge is also the driving force behind Pub in the Park. The event has been running for a number of years, creating what he described as “the best pub beer garden in the world”.
“We try to bring in loads of different food, different operators from pubs or small-scale restaurants and local communities.”
Initially a celebration of the Hand and Flowers’ 10th anniversary, the event now brings together operators from pubs and small-scale restaurants, artisan producers, nationally recognised music artists and the local community, with editions taking place in Marlow and St Albans.
“We did the first one in Marlow and it just went so well so then the idea was to try and find other spaces that have similar demographic and similar viewpoints on food and drink and that community-based spirit. That is really important because that’s what most pubs are built on, their communities and local support, so that’s really important.”
Despite challenges, Kerridge sees innovative approaches emerging in the pub industry. He explained: “There’s a lot more smaller menu, shorter opening pubs that are beginning to open and be taken on by younger entrepreneurial chefs who are building business plans. They might only open five days a week and do three lunches and five dinners, or six different types of starters and five or six different types of main course.”
These smaller operations, while not a long-term solution for everyone, offer valuable opportunities for new entrepreneurs. “A small-scale, almost crossover pub-style restaurant that operates in those worlds can be good for communities and spaces.
“As a long-term business, I’m not entirely sure how a small operation that opens five days and smaller operations will fare, but it does give people great opportunities to get in there. And it has forced landlords to rethink their proposition and where they sit.”
