Pubs: Inflation making 'it almost impossible to make a profit' due to lack of support

Altus Group have called on the Chancellor to step in and offer support to the industry during his Autumn Statement. Credit: PA Images

A body representing pubs in Wales has told ITV Wales it is almost impossible for hospitality businesses to make a profit because of inflation.

The number of pubs being demolished or converted for other uses across England and Wales surged by 50% over the latest quarter, according to new figures.

More than pubs are closing in Wales than anywhere else in the first six months of this year, leading to calls from the industry for more support from the Treasury at the Autumn Statement.

Official Government statistics have revealed that 230 pubs disappeared for good in the three months to June 30 as the impact of soaring costs and pressure on consumer budgets became more stark.

The data, which was compiled by commercial real estate specialists at Altus Group, showed a 50.3% jump after 153 pubs vanished in the first quarter of 2023.

It means more than two pubs a day have left local communities in the last quarter.

David Chapman, Executive Director for Wales for UK Hospitality, says inflation, partnered with the minimal support they've been given is causing businesses to go under.

He believes this is a harder time for the industry than the Covid Pandemic was.

He told ITV Wales: "I think this is more difficult for the industry to cope with because we're trading at a time when it is almost impossible to make a profit.

"In Covid we had a lot of government support, incredible amounts in fact. I think furlough was work about £450 million a month in Wales.

"There isn't any support for us now apart from some for business rates. This is hard and it's come on top of some really difficult years.

"There's a fatigue already inside businesses, in terms of survival."

  • David Chapman, Executive Director for Wales for UK Hospitality says inflation means they are experiencing a tougher time than during the pandemic.

The overall number of pubs in England and Wales, including those vacant and being offered to let, fell to 39,404 at the end of June 2023.

It also represents a sharp acceleration year-on-year, with only 386 pubs vanishing throughout the whole of 2022.

During the first six months of the year, Wales lost the greatest number of pubs, with 52 disappearing, with both the London and North West regions losing 46 pubs each.

Alex Probyn, president of property tax at Altus Group, called on Chancellor Jeremy Hunt to act in his Autumn Statement to ease the pressure of significant business rates on the sector.

Currently, firms which pay business rates - the property tax affecting high street firms - will see an inflation-linked increase come next April, unless there is Government intervention. This is expected to add more than 6% to bills next year.

The number of pubs shutting for good across England and Wales has jumped by 50%. Credit: PA Images

Mr Probyn said: "With energy costs up 80% year-on-year in a low growth, high inflation and high interest rates environment, the last thing pubs need is an average business rates hike of £12,385 next year."

Pubs, as with other eligible hospitality, leisure and retail businesses, currently get a 75% discount off their business rates bills for the 2023/2024 tax year up to a cap of £110,000 per business but this is set to end on March 31 2024.

The Chancellor is set to deliver his Autumn Statement on 22 November.

ITV Wales have contacted the Treasury for a response.

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