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ICSM Business News: only one in three restaurants and bars make a profit while insolvencies rise by 41% as Brexit, Covid and Inflation bite
By Harry Mottram: Shocking statistics released by hospitality trade bodies reveal that only 37% of restaurants and bars actually make a profit.
The news from UK Hospitality, the British Institute of Innkeeping, and the British Beer and Pub Association gives depressing reading as the industry comes to terms with a series of hammer blows. They are one of the sectors most damaged by the exodus of EU staff caused by a combination of Brexit and then Covid. The pandemic also saw so many European staff leave the UK as the businesses were shut down by Government regulations to prevent the spread of the virus or have failed to reopen after taking huge losses. The number of restaurants that have ceased trading has increased by 41% year on year according to accountants Price Bailey who conducted the research.
With inflation into double figures this year plus hikes in interest rates plus the issue of the need to repay loans taken out to cover Covid it comes as no surprise that the industry is in crisis. The trade bodies have called on the Government to cut VAT to 12.3% to help businesses in these straightened times.
In a joint statement, UK Hospitality, the British Institute of Innkeeping, and the British Beer and Pub Association, said: “These figures clearly show the danger to the industry and financial loss to the country via taxes posed by the current staffing crisis. In short, the recovery of both the sector and the UK economy are being threatened by this workforce shortage.
“Operators have been doing all they can to help solve the issue, from increasing wages, to flexible working. However, this can only help so much, and the sector must be given targeted support in order to solve the crisis.
“People are at the heart of hospitality, providing the quality customer service and personal experiences that people want. On the other side of the coin, the sector offers jobseekers a wide range of roles and fulfilling careers with great potential for progression. The sector offers opportunities to people of all levels of expertise, experience and backgrounds. A booming hospitality workforce will create fantastic opportunities, drive economic growth and aid regeneration in communities across the UK.”
It comes amid a growing list of insolvencies in the sector with liquidators appointed at the Algarves Restaurant, Boldmere Restaurant, La Dolce Vita Restaurant in Marple and the Walpole Restaurant in recent days.
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For details for the work of the journalist Harry Mottram visit www.harrymottram.co.uk