A new report by accountancy firm UHY Hacker Young has revealed that a growing number of British pubs have had to shut their doors as energy bills rise, and inflation grows.
The report details the forced closure of 512 pub and bar companies in the UK last year due to the cost of living crisis, which was up from 280 in 2021. The analysis noted the number of such bankruptcies increased by 83% in 2022.
The report stated, “The cost-of-living crisis, including interest rate rises, has impacted consumer habits, making them less likely to spend on ‘non-essentials’, including a drink or a meal at a pub. Rail strikes have also prevented many customers from travelling to pubs in town or city centers.”
The report notes that inflation is driving up the costs that pubs are paying for beer and supplies. Since many of these businesses have little to no savings or ability to borrow in the aftermath of the Covid-19 lockdowns, the financial crunch being produced by inflation is forcing many to shut their doors.
Peter Kubik, one of the authors of the report, said, “This is a particularly difficult period for pub and bar owners, who find they need to spend more and more while earning less and less. Following an extended period of lost revenues during the pandemic, the cost-of-living crisis has been the final nail in the coffin for many.”
The report comes on the heels of the announcement by the British government that it plans to slash the aid it is providing to businesses and public sector entities to offset their skyrocketing energy bills.
Introduced in September of 2022, the current Energy Bill Relief Scheme, has provided £18 billion ($22 billion) to businesses to help offset soaring energy bills. However the current relief package will end in March, and the new relief program will see the funding available reduced to £5.5 billion ($6.7 billion).
In an interview with news outlet City A.M., Emma McClarkin, CEO of the British Beer and Pub Association, said, “The spiraling cost of energy has been our members’ number one concern for close to a year now and remains so… As this data demonstrates, there is no doubt that energy costs are causing businesses to fail – people simply cannot afford to make ends meet and are left with no choice but to shut up shop, meaning a community loses its pub or brewery, and the jobs and livelihoods that go with it, for good.”
