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Numerous establishments in the UK, including bars, restaurants, and pubs, are closing permanently due to issues such as excessive ground rent, increasing production expenses, and a high number of customers not showing up for reservations.
Industry data shows that the number of licensed premises in Britain decreased by 3.6% from 103,682 to 99,916 in the span of a year, with more than 10 closures occurring daily.
According to the most recent data from CGA, this is the first instance in the research’s history where the total has fallen below 100,000.
The hospitality sector claims that it is struggling due to the combined challenges of increasing energy costs, high rent prices, and expensive food bills. Additionally, they are facing issues such as understaffing and customers not showing up for reservations. These problems are compounded by the ongoing financial strain caused by the cost of living crisis, as well as the aftermath of the Covid and Brexit situations.
Tom Kerridge, a well-known chef and owner of multiple restaurants, spoke to The Independent about the significant challenges that the hospitality industry is currently facing. Due to the impact of Covid, his business has suffered a loss of over £1 million.
After the UK’s departure from the European Union, the culinary expert mentioned that increases in food prices and difficulties in finding employees have been significant challenges. The lack of workers has resulted in higher labor expenses, making it difficult for businesses to afford. Nevertheless, he stated that the primary source of stress has been the rising cost of energy.
Kerridge has received negative feedback in the past for this particular dish.
According to Kerridge, his renowned restaurant, The Hand & Flowers, located in Marlow and the only pub in the UK with two Michelin stars, received a 700% increase in utility bills last year.
The impact of these strains on his business, which consists of seven restaurants and pubs, has been significant. According to the owner, the business has lost more than £1 million since the beginning of the pandemic, as well as twice that amount in accounting losses that they are currently working to recover.
According to Tom Kerridge, the owner of The Hand & Flowers pub in Marlow, which is the only pub in the UK with two Michelin stars, the utility bills for the establishment saw a 700% increase last year.
Martin McTague, the National Chair of the Federation of Small Businesses (FSB), expressed concern about the challenges faced by the hospitality industry. Rising rents and input costs, along with inflation, high energy prices, and low consumer demand, have led to declining revenues for over half of small businesses in this sector. Additionally, there are labor shortages leading to higher employment costs, increases in the National Living Wage, and upcoming changes to pensions laws, which are all contributing to the strain on these businesses.
According to FSB’s Small Business Index for Q3 2023, the hospitality industry had the least amount of confidence, with accommodation and food service activities scoring -31.1 points.
Simon Rimmer, a 60-year-old co-host of Channel 4’s Sunday Brunch, described last Tuesday as a “devastating day” as he announced the closure of his meat-free eatery, Greens.
According to the findings of the organization’s research, over half (56%) of small businesses in the hospitality industry have experienced a notable rise of over 10% in their operational expenses within the past year.
According to Kerridge, the majority of restaurants, bars, and pubs are simply aiming to break even by the end of the year. However, he cautions that numerous independent establishments will likely be forced to shut down soon. He states, “It’s stifling us completely. The industry is in urgent need of assistance.”
Last week, two well-known restaurants declared that they would be closing down because of overwhelming expenses.
Simon Rimmer has announced that after 33 years, he will be closing Greens, a restaurant in West Didsbury, Manchester that he opened with his friend Simon Connolly.
Simon Rimmer, 60 years old and one of the co-presenters of Sunday Brunch on Channel 4, described Tuesday as a “devastating day” when he announced the closure of his vegetarian restaurant Greens in West Didsbury, Manchester. He had opened the restaurant 33 years ago with his friend Simon Connolly.
He shared a video on X, previously known as Twitter, where he discussed how a 35% rent increase and rising expenses for raw materials, utilities, labor, and food have made his business unsustainable.
Tony Rodd, a participant in the 2015 season of MasterChef, expressed his profound disappointment and sadness as he announced the closure of his restaurant Copper & Ink in Blackheath, London on January 2nd.
Tony Rodd, a contestant on MasterChef in 2015, shared that he and his team are feeling “devastated” and “heartbroken” as they announced the closure of their restaurant, Copper & Ink.
The source of the information is from the collaboration of BBC, Shine TV, and PA Wire.
On X (formerly known as Twitter), Rodd shared a video in which he predicted the closure of numerous independent restaurants in the coming future. He stated that the hospitality industry is struggling due to the challenges posed by Covid, Brexit, the increasing cost of living, and high energy expenses.
The CEO of HOSPA, Jane Pendlebury, expressed her sadness over the closure of many hospitality establishments in the UK, citing ongoing financial pressures on the industry as the cause.
According to her, the current state of the hospitality industry includes frequent increases in food prices, higher energy expenses, and difficulties in finding enough employees. These factors are causing many business owners to permanently shut down. The ongoing cost of living crisis in the UK exacerbates these challenges, making it harder for businesses to stay afloat and affecting consumer spending habits. Another issue is the negative effects of no-shows on reservations, which poses a significant obstacle for hospitality businesses.
2021.
Tony Rodd has declared that his establishment, Copper & Ink, located in Blackheath, London, will be closing on January 2nd, 2021.
According to a study conducted by the Liberal Democrats and reported by the House of Commons Library in December, nearly 5,000 additional hospitality and retail establishments closed down compared to the number that opened in the first nine months of the year.
Sarah Olney, the party’s spokesperson for Business and Treasury, cautioned that lively high streets in the UK are now becoming abandoned and desolate.
According to The Independent, she stated that numerous pubs, restaurants, and cafes are shutting down permanently because of exorbitant energy expenses, borrowing fees, and insufficient staff. As a result, our bustling streets are becoming deserted as the Conservative Government neglects to address their worries.
Instead of taking the chance of more hospitality establishments shutting down, government officials should provide support to small businesses by revising business rates, tackling shortages in skilled workers, and simplifying procedures and paperwork for international trade.
Kerridge expressed disapproval of the government’s focus on ineffective initiatives and misallocation of funds towards frivolous projects. He highlighted the detrimental impact on industries such as hospitality, which are struggling and falling behind. He urged the government to decrease the current 20% VAT rate by 10%, emphasizing the significant positive impact it would have on businesses, potentially saving them from closure. This reduction would alleviate some of the financial burden faced by businesses.
Pendlebury expressed that HOSPA is in favor of UKHospitality’s plea for a reduction in VAT to assist the industry in maintaining affordable prices and recovering. She encouraged the government to prolong the relief from business rates, which could prevent a potential 7% rise in bills in March. Additionally, she recommended that business owners make the most of technology to streamline processes and increase efficiency.
McTague is urging the government to consider overall employment expenses and support small businesses through measures such as increasing the Employment Allowance and raising the VAT threshold to £100,000.
A representative from the government stated that during the Autumn Statement, the Chancellor revealed plans to provide over £4 billion in aid to small businesses and the hospitality industry. This includes a 75 percent reduction in business rates and a freeze on alcohol duty rates.
“We released the UK’s initial Hospitality Strategy in 2021 to enhance the durability of the industry and formed a Hospitality Sector Council to supervise its implementation. We are collaborating closely with the sector to address its obstacles, and we will persist in supporting its growth and success within their respective communities.”
They also stated that the multiplier for small businesses will remain at 49.9p for the fourth year in a row.
Source: independent.co.uk
