Cost pressures take the shine off hospitality's ‘golden quarter'
Hospitality businesses have warned they face a struggle to survive during the normally lucrative ‘golden quarter' around Christmas without further government support.
Restaurants, hotels, and bars who typically use the busy festive period to build a financial buffer to take them through the quieter January and February months fear rising costs could wipe out their profits.
"[In] my 40 years working in food and drink, we've never had so much uncertainty swirling around," said Paul Askew, chef patron at the Art School restaurant in Liverpool.
"My hope is that with Rishi Sunak and his cabinet now confirmed, stability will return, and important decision making will take place.
"[Hospitality] should be thriving and not just surviving, having faced a succession of cliff edges during the last two and a half years and looking ahead there are still more to come."
Chancellor Jeremy Hunt has delayed next Monday's planned fiscal statement until 17 November in the wake of Rishi Sunak becoming prime minister.
The Night Time Industries Association has called on him to support businesses and warned that "thousands" of venues and jobs could be lost in the next few months without government aid.
Impact of rising costs
Rob Star, founder of Electric Star Pubs, said energy costs across his seven London sites had increased 400% this year.
Drinks prices at his bars have risen this year as a result but he said there was "clearly a limit" on how much could be passed on to the customer.
Star described the scrapping of the government's planned freeze in alcohol duty as a "kick in the teeth", adding: "How many more companies need to throw the towel in, before our government realises they are pushing all of us over a very high cliff with nothing to break our fall?"
Michelle Armstrong, owner of the Eden Group hospitality company in Coatbridge, Scotland, warned its four sites may have to close, with the loss of 96 jobs, unless the government took "immediate action" on energy costs, VAT, alcohol duty and interest rates.
"With bills rising by up to 400%, the industry will be decimated without a pandemic-style response as the cost of living crisis is here and assistance is needed to protect business and jobs," she said.
"Independent operators like ourselves have little to no chance in a market already dominated by multinationals monopolizing on these dark days, probably in the knowledge that they will survive the storm then reap a long-term control of pricing."
The economic uncertainty is also stalling the expansion of many businesses. Bruno Nunes, chief executive of Wales' Creative Hospitality Group, said its three-year growth plans had been put on hold since July.
"We need action from government, not another general election or time wasted with party politics," Nunes added.
Askew wants to see VAT permanently reduced from 20% to 15% and the entire business rates system overhauled.
"I hope that someone is finally listening in Whitehall…it's time for some real leadership and bold decisions from our new prime minister," he said.
Image: Sampajano_Anizza / Shutterstock
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