Pubs and restaurants across the UK are facing a “perfect storm” of challenges this winter, forcing many to cut opening hours and reduce capacity by up to 20%. The industry is grappling with soaring energy bills, staff shortages, rampant food inflation, and fragile consumer confidence, compounded by a reduction in government support for energy costs.
Kate Nicholls, chief executive of UKHospitality, said businesses are concerned about the coming months, traditionally a quieter period. A survey by the industry body found that one in four people plan to go out less frequently or spend less due to the rising cost of living. Nicholls noted that around half of members are restricting opening hours and days of operation, primarily driven by staff shortages and high energy costs.
Energy costs have risen from 4-5% of turnover to 16%, making it the second-largest expense after staffing, surpassing rent and rates. Nicholls warned that government support “could be the difference between surviving and not” for many businesses. Reports suggest the government intends to halve financial support on energy bills when the current scheme ends in March, coinciding with the financial year-end and rent quarter.
Despite the challenges, Nicholls expressed cautious optimism, noting that inflation and interest rates may have peaked. “If we get to the new year and the signs start to be positive around the economy, we know that there is a lot of demand,” she said.
