Hospitality sector sees ‘worrying’ year as pub insolvencies jump 66 per cent
New figures reveal that the number of pub and bar insolvencies has risen 66 per cent in the last year, a “tragic reflection” of the year’s economic challenges, experts say.
According to Insolvency Service data published by accountancy firm UHY Hacker Young, the number of pub and bar insolvencies in the last year rose from 438 to 725.
Peter Kubik, partner at UHY Hacker Young said the number is a “worrying sign” given that “operators need to be busier than ever just to break even”.
Office for National Statistics (ONS) data shows 67 per cent of people are spending less on essentials, the firm said, which could be a contributing factor for any lack of footfall for pubs.
UK-wide average draught beer prices have increased 9 per cent from £4.23 in January to £4.62 in September, the firm said.
Kubik added: “The sharp rise in costs in the last eighteen months has been the final push into insolvency for many pub businesses, which were saddled with COVID-era debts.
“After enduring a huge drop in revenue during the pandemic, pub and bar companies are desperate to turn a profit. Instead, as we run up to the festive period, high inflation and interest rates is making this impossible for many owners.”
Many pub and bar owners are “eating into their savings”, Kubik said, in turn adding more pressures on the sector.
UKHospitality chief executive Kate Nicholls told City PM the numbers are a “tragic reflection” of the challenges facing the UK’s hospitality businesses.
She added: “Energy bills, food inflation and COVID debts all remain significant cost pressures for venues, and in April the sector is set to face a hike in business rates of nearly £1 billion unless action is taken at the Autumn Statement.