Struggling pubs are reeling from rising business rates, wages and energy bills, with customers at the limit of what they will pay. Nick Evans, co-owner of the Old Crown Coaching Inn in Faringdon, Oxfordshire, said the only way to make a profit would be to use microwaves and packet food, which is not why he entered the industry.
The latest blow to the sector is a triple whammy: a rise in the minimum wage, increased business rates from April, and surging energy prices due to the Iran crisis. Evans said beef, beer and wine costs are soaring, and Diageo is about to put up Guinness, meaning a pint would need to cost nearly £8. “We can’t increase our prices any more without people not coming in,” he added.
The pub’s annual revenue is about £1.4m, but costs for drinks and ingredients are £430,000 and rising. Water bills add £20,000, laundry and maintenance £100,000, and rent and insurance a similar sum. The annual gas and electricity bill is £80,000, and a significant rise is expected when the contract renews in July.
After paying VAT of £234,000 and national insurance of £45,000, the business is in the red. Kate Nicholls, chair of UK Hospitality, warned the sector could be “hurtling towards another energy crisis”. Evans said everyone in the industry has stopped investing, and his plans to open six more rooms are on hold.
