SLTA Presses New PM and Holyrood on Engagement and Fair Competition
THE SLTA (Scottish Licensed Trade Association) today releases its Summer On-Trade Market Insight Report, highlighting the continued challenges facing Scotland’s pubs, bars and licensed hospitality venues in the light of continuing rising costs, and a lack of business and consumer confidence.
Conducted following the Fifa World Cup and Glasgow Commonwealth Games, the survey’s responses represent over 300 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses and contain key insights into the continued challenges facing hospitality, driven by costs that are increasing significantly above inflation, and visitors having less disposable income.
Colin Wilkinson, SLTA managing director, said: “The World Cup provided a brief sales boost, but the broader economic outlook remains challenging. Members report weak consumer confidence as global events prolong economic uncertainty.
“A new trend has also emerged with 16% of respondents saying visits have declined because of the weight-loss drugs phenomenon.”
Mr Wilkinson added: “One of our unique challenges in Scotland is a higher cost base, as hospitality businesses in Scotland face higher commercial rates and energy charges than our counterparts across the rest of the UK.
“Business profitability remains a major concern, so we urge all parties within the Scottish Parliament to place early rates reform, and within the Westminster Parliament a reduction in VAT for the licensed hospitality sector, truly at the heart of their economic strategies.
“Both governments have recently stated again that one of their core priorities is growing the economy. Well, the time is now – no more just ‘talk the talk’, it’s time to ‘walk the walk’.”
The Republic of Ireland’s tourism and hospitality sector, which is a key competitor to Scotland’s, has been given great recognition of its importance to the country’s economy and support from its government, which acted to support the industry by reducing VAT rates, Mr Wilkinson pointed out.
He stated: “The SLTA calls on the UK to support the UK hospitality and tourism sector in the same manner and reduce VAT, something the new Prime Minister supported not that long ago.
“We also ask – again – for Scotland’s First Minister to add his support for a VAT reduction for the hospitality sector, something he dodged answering recently when asked by one of his own industry-respected party colleagues Alyn Smith MSP, if he would back the UK-wide ‘VAT’s the Problem’ campaign which is calling on the Westminster government to cut VAT to 10% for hospitality businesses.
“We also ask the Scottish Government to fast-track the review of the commercial rating methodology used for the rating of licensed hospitality venues in Scotland and to engage more closely with the sector.”
Key findings of the Summer On-Trade Market Insight Report include:
• Trading conditions remain challenging with 58% of outlets in decline. However, the World Cup gave trade a boost, with 66% of respondents either stable or growing.
• By contrast, the Commonwealth Games did nothing for sales in pubs and bars.
• Profitability remains a major concern, but forecast profitability continues to show some positives with 71% expecting to be break even or be profitable, versus 63% in our winter survey.
• Forecast trading for the remainder of 2026 is more positive than in our previous survey, with 61% of outlets expecting growth or stability, and a 9% drop in outlets considering closing.
• Costs continue to rise – 97% of outlets report year-on-year increases, and 57% of outlets face cost increases significantly above UK inflation rates.
• In previous surveys, 84% of respondents highlighted a lack of Scottish Government economic alignment with pubs & bars. Some 89% view the engagement level has not changed since the May Holyrood election.
• Weight-loss drugs are having a significant impact with 16% of operators believing they are resulting in fewer visits, and 22% stating their customers are more discerning – 38% in total.
• The new Prime Minister should focus on reducing VAT in hospitality, fast-track the review of the commercial rating system, and governments should harmonise rates across the UK and reverse employers’ National Insurance increases.
• There is concern about the future talent pipeline and calls for more support for apprenticeship schemes.