On-trade

25% of BII members have accrued debts of up to £80k

55% of respondents to a British Institute of Innkeeping survey have accrued pandemic-specific debts of over £20,000 per site, with over one in four having debts of up to £80k.
43% of BII members have seen a rise in the cost of food, with 59% reporting increases of between 11% and 50%. In addition, 41% say they've seen a rise in the cost of drinks, with 72% reporting a rise of up to 10%. 

43% of BII members have seen a rise in the cost of food, with 59% reporting increases of between 11% and 50%. In addition, 41% say they’ve seen a rise in the cost of drinks, with 72% reporting a rise of up to 10%.

Considerable time will be needed to pay back these debts, with 57% needing more than two years and one in two of those needing more than five years.

The BII released the results of its most recent survey of operator members ahead of all restrictions having been lifted across the UK. This details the impact that the pandemic has had on their businesses, the fragility of their pubs as they start their recovery and what support will be needed to safeguard their futures.

The results show a clear picture of debts built up over the last 17 months and rising costs across all areas of their businesses, from staffing to increased costs for utilities, food and drink supplies.

Only 42% of respondents were confident of returning to profit once all restrictions were lifted as increased costs and debt repayments impacted their businesses. At the same time 72% faced full rent payments from the 19th of July. 

 

Staffing

Staffing remains a huge challenge for pubs with nearly half struggling to recruit the staff they need. Additionally, 72% of operators have had to raise wages for front-of-house staff. 40% of these have had to increase wages by more than 10% to attract and retain staff.

Similarly, 57% have had to raise wages for back-of-house and kitchen staff, with 48% having to increase wages by more than 10% according to the BII.

 

Rise in costs

43% have also seen a rise in the cost of food, with 59% reporting increases of between 11% and 50%. In addition, 41% say they’ve seen a rise in the cost of drinks, with 72% reporting a rise of up to 10%.

Utilities costs are also rising dramatically, with 30% reporting an increase from last year. Half of these have seen increases of up to 25%, but a fifth have seen rises of up to 50%. 10% have either been refused supply or have had to pay upfront for their gas, electric or water services.

The threat to the UK’s licensed trade is very real as confirmed in The Bank of England’s latest Financial Stability Report which points to the particular vulnerability of small hospitality businesses as the economy emerges from Covid-19 restrictions, pointed out BII Chief Executive Steven Alton, “These small businesses are essential and valued hubs of their communities, providing accessible, social spaces for everyone to come together to connect, celebrate and commiserate,” he added, “Pubs provide so much more than just a place to socialise, contributing significantly to local employment, local suppliers and the wider economy, with the average pub paying around £140k into the treasury every year.

“They urgently need support from Government in the form of an extension of the Business Rates holiday to April 2022 for England to match the devolved nations, an extended VAT reduction, an immediate cut to duty on draught products specifically for pubs and an urgent reform of the entire rates system. This support is an investment in the future of not only these vibrant and vital community spaces, but also in the economic recovery of the UK.

“Our pubs are an essential part of our national heritage and will be needed now more than ever as we rebuild the social connections that we have lost over the last 17 months.  With ongoing support, they can be at the heart of the economic recovery as well as at the heart of communities across the UK, bringing us all back together again.”

 

 

 

 

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