The BII has today released the results of its most recent survey of operator members, detailing 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.
Ahead of all restrictions being lifted across the UK, 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.
The survey revealed that 55% of respondents have accrued pandemic specific debts of over £20k per site, with more than 1 in 4 having debts of up to £80k. They will also need considerable time to pay back these debts, with 57% needing more than 2 years and 1 in 2 of those needing more than 5 years to repay debts.
Only 42% of respondents are confident of returning to profit once all restrictions are lifted as increased costs and debt repayments impact their businesses. At the same time 72% will be facing full rent payments after 19th July.
Staffing remains a huge challenge for pubs with nearly 1 in 2 struggling to recruit the staff they need. Additionally 72% of operators are having 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%.
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 have 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 up to 25%, but a fifth have seen rises of up to 50%. 10% have either been refused supply, or had to pay up front for their gas, electric or water services.
Steven Alton, BII CEO commented:
“The resilience, goodwill and determination of our nations’ pubs has been incredible to witness over the course of the pandemic. However, it is clear to see that this alone will now not be enough to ensure that their businesses survive.
“The threat is very real as confirmed in The Bank of England’s latest Financial Stability Report, released this week, which points to the particular vulnerability of small hospitality businesses as the economy emerges from COVID-19 restrictions.
“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. 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.”