More than 10,000 pubs and restaurants 'are at risk of closure'

More than 10,000 pubs and restaurants are at risk of closure due to ‘perfect storm’ of inflation and surging energy costs, hospitality chief warns

  • Hospitality sector is facing ‘as big a crisis, if not bigger’ than during pandemic 
  • Kate Nicholls estimated 30,000 of UK Hospitality members’ businesses have no cash reserves
  • She estimated 20,000 of these businesses are still operating below break-even 

Over 10,000 pubs and restaurants could face closure thanks to a ‘perfect storm’ of inflation, soaring energy costs and rising rents, a senior industry figure has warned.

Kate Nicholls said the hospitality sector is facing ‘as big a crisis, if not bigger’ than during the pandemic. 

‘We’re already seeing a lot of independent operators handing in the keys and walking away,’ the chief executive of trade body UK Hospitality told The Mail on Sunday.

She estimated that 20,000 of UK Hospitality members’ businesses are still operating below break-even and 30,000 have no cash reserves. 

Kate Nicholls said the hospitality sector is facing ‘as big a crisis, if not bigger’ than during the pandemic

She added: ‘I’ve never seen such a toxic cocktail of costs. It is a perfect storm.’

Inflation in the restaurant trade is running at 13 to 17 per cent because of supply-chain disruption due to Covid and the war in Ukraine, and higher wages due to staff shortages.

Emma McClarkin, chief executive of the British Beer & Pub Association, said: ‘Cost inflation means we have to trade 20 per cent up just to stand still. We know that keys are being handed in at some tenancies.’

The working-from-home trend has hit city-centre venues.

Calling for a rethink on VAT, Wetherspoons boss Tim Martin said: ‘Pubs and restaurants pay 20 per cent VAT in respect of food sales, whereas supermarkets pay nothing, enabling them to subsidise the price of the beer they sell.

‘Unless there is tax equality, the hospitality sector will lose out.’


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