ON the same day that the Chancellor announces plans to kickstart the UK’s floundering economy, the Scottish Licensed Trade Association (SLTA) reveals in its latest Market Insight Report that 80% of survey respondents expect the Scottish economy to decline – with 6% considering closing their premises.
The SLTA today releases a snapshot survey of the challenges faced by Scotland’s pubs, bars and hospitality venues in the year 2024, with a deep dive into the festive trading period, and the expectations of the sector in 2025.
It reveals that the Scottish licensed hospitality industry ventures into 2025 with concerns over continued pressure from rising costs, staff availability, changes to employers’ national insurance contributions, and low economic confidence.
The survey’s responses represent over 400 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses throughout the country, and contain key insights into the continued challenges facing hospitality, driven by a challenging economic environment and visitors with less disposable income.
Colin Wilkinson, SLTA managing director, said: “Christmas and New Year was a difficult period for our industry with a universal theme of visitors spending less time in outlets and spending less on food and drink. We did see an upturn in lower-strength products, but this was offset by customers having ‘one course instead of two’.
“Over the course of the calendar year, 49% of outlets were down year on year, but over the festive period this increased to a worrying 69% of outlets reporting a decline.’’
Mr Wilkinson added: ‘‘We also continue to face rising costs and staff shortages – 38% of outlets told us that staff availability is impacting upon opening hours, up from 23% in the summer. We are also seeing increased costs from suppliers and government increases in taxes.
“Regarding the pending changes to NI contributions, 75% of outlets expect new employers’ NI costs to impact on their staffing levels. This will make it even more difficult for businesses to open their full operating hours, remain competitive and get more people into our venues.
“We are also facing the harsh reality that 6% of respondents are seriously considering closure.”
The SLTA has been conducting Market Insight Surveys for nearly 10 years with the analysis based on quantitative research from outlets covering the length and breadth of the country. This survey is supported by major food and drink chains, and independent pubs, bars and hotels, across Scotland’s licensed hospitality sector.
Commenting on staff availability and how the government can support the sector, Mr Wilkinson added: “One proposal that the SLTA supports is the introduction of a Scottish hospitality workers’ visa, which could help to alleviate staff shortages.
“The hospitality industry fulfils a critical role in Scotland’s food, drink and tourism industry, and we are keen to work with government to explore opportunities to protect jobs in this vital sector and help businesses to work to their full potential.”
Executive summary of key challenges
• 59% of outlets were down at Xmas 2024/25 versus last year. However, for the total calendar year this fell to 49%.
• Visitors were spending less time and less money in venues, but there was an increase in low-alcohol products.
• Staff availability challenges are increasing, with 38% of outlets reporting an impact upon trading, up from 23% in summer 2024.
• Rising rates continue to be a challenge across the sector with 33% of outlets seeing an increase of 10% or more.
• Cost pressures continue to have an impact with 63% of outlets reporting increases of over 10%.
• Over 80% of outlets expect the Scottish economy to decline.
• 48% of outlets expect to grow or remain stable, while 6% are looking at possible closure.
• 75% of outlets expect new employers’ national insurance costs to impact on their staffing levels.
• Despite the challenging environment, 58% of outlets expect to be profitable or break even in 2025.
• Outlets expect to see a continuing shift towards lower-strength products.