Why they need our support this month
For many people, January will be a time for taking it a little bit easier after a busy and hectic holiday season.
After an annual overindulgence, the desire to cleanse and renew is strong which is why the idea of “dry January” is so appealing to repentant overindulgers.
But spare a thought for the already beleaguered hospitality industry that were already facing a bleak midwinter before having to face up to the fact that thousands of their potential customers would be enacting a well-meaning but ultimately damaging self-imposed boycott.
The potential of the best post-Covid Christmas trading period for many restaurants and bars was scuppered by a combination of the ongoing cost of living crisis, the additional bills that the Christmas period brings and travel restrictions due to various strikes and other incidents meaning many customers decided to stay at home instead of going out for a drink or meal.
Some instant research from the Night Time Industries Association (NTIA) has found that trade over this Christmas period was “substantially down” on the last pre-pandemic festive period from 2019.
So several of the top representatives of the food, drink and hospitality industries are urging customers to come and explore the alternatives to alcohol and back their local establishments rather than just staying at home.
Emma McClarkin, chief executive of the BBPA, said: “Approximately 85% of our members now serve alcohol-free beers and this is only increasing.
“High inflation has signalled tougher times for the country with consumers understandably finding ways to cut back.
“We’d encourage people to seek out their community hubs and come together with friends and family at their local. Not only will they be greeted with warmth and friendly faces, but you’ll be supporting much-loved businesses that urgently need help to survive.”
Hospitality industry insolvencies
|2022 (up to Nov)
UKHospitality, the trade body for restaurants and hotels estimated that the industry lost out on £2.3 billion in taking due to one in three bookings being cancelled in December.
Assuming hospitality businesses can navigate the opening months of 2023, they can expect changes to existing support when the government halves its existing energy bill relief for companies at the end of March.
No details of a replacement scheme have been announced yet although the Chancellor has indicated that they would be looking at a targeted support package for the most vulnerable businesses in Spring including pubs, bars and restaurants.
Katie Nicholls, chief executive of UKHospitality said that any reduction in support for the sector would be “absolutely devastating” as they have already seen their average bills increase by as much as 200% since April 2022.
She also said that members were opting to cut their own capacity already as the first few months of the year were traditionally quieter for the sector.
She said: “The fear is that people will tighten their belts quite considerably. That’s when the cost of living will bite and you’ll see customers not going out as frequently.
“There’s no doubt quarter one (Jan-Mar) is going to be tough. Members are restricting their opening hours, their capacity, the days of the weeks they’re opening – driven primarily by staff shortages and being exacerbated by energy costs and the need to make sure they can be as profitable as they possibly can.
“Planning for the future is difficult and it was obviously disappointing that an announcement of further support for energy bills wasn’t made before Christmas. Energy costs have gone from being the fourth-largest cost, around 4% to 5% of turnover to being the second largest and about 16%. That’s more than rent and business rates combined so before you even open your days, you’ve got to be able to pay your energy bill.
“Ongoing support could be the difference between surviving and not for so many businesses, so we need details of that to come as early as practically possible.”
Support is critical for an industry that is already seeing a record number of closures.
Research showed that on average 32 pubs in England and Wales closed each month in 2022 dropping from 40,173 to 39,787. This was actually an improvement of 13.1% on reductions from the previous year but is still a worry for a beleaguered industry that plays an important role in the heart of their local communities.
Whether your business has been running on full steam throughout the holiday season or is just getting ready to fire up once more now 2023 is just starting – this might be as tough a one as the pandemic years.
The cost of living crisis shows no signs of receding and we’re only a couple of months away from a new financial year with implications for business rates, energy bill support, corporation tax, rent coming due for Q1, bounce back loan recovery and ongoing high inflation for food and ingredients.
The time between now and then is critical for every business owner and director so if they can use it wisely and make some crucial decisions now, they can be reaping the benefits when less fortunate entrepreneurs will instead be reaping a bitterer harvest instead.
We offer a free initial consultation with one of our team of experienced, expert advisors to discuss what issues your business is facing and the most efficient and effective way to deal with them.
Once they have a clearer understanding of your unique situation, then they will be able to furnish you with a range of options you can take advantage of, probably more than you originally thought you would have.
But you can only begin to move forwards when you take the most important step – the first one – and get in touch with us.