A UKHospitality survey of more that 340 hospitality businesses (which equates to roughly 8200 venues with 190,000 staff) has concluded that nearly half of operators (47%) are reporting that they will be forced to put up their prices by more than 10% this year because of rising costs. 15% of these anticipated rises of more than 20% on their retail prices.
The rising costs are made up (not exclusively) by:
- 41% energy bills
- 19% labour costs
- 17% food prices (which one can argue also includes energy cost rises from suppliers)
- 14% drink prices (same as above)
- 21% in insurance costs
In April there will be 'five horrors' (as labelled by UKHospitality) which are:
- National minimum wage and employers national insurance contributions increases
- VAT returning to 20%
- Headline inflation being expected to peak at 7%
- Moratorium on legal action by creditors ending
UKHospitality chief executive, Kate Nicholls, said: “One in three businesses in our sector have no cash reserves left and are already carrying heavy debt burdens. Many of our community pubs, restaurants, hotels and hospitality venues will therefore fail as the cost-of-living crisis bites, causing demand to faulter. This can only cause the UK’s wider economic recovery to stutter. This April’s planned increases in VAT, employment costs and business rates are therefore likely to prove one financial burden too many for businesses. The industry wants to play its full part in the UK’s recovery from the pandemic but, as these latest figures highlight, we can only do that with further support from the government – support that must include keeping VAT at 12.5% permanently.”
