A third (32%) of hospitality businesses are at risk of collapsing as the real term impact of inflation hits their bottom line, new research has shown.
The UKHospitality Quarterly Tracker, in association with CGA, show has revealed that revenue was up 4.2% across the sector in 2022, but down 13% in real terms when inflation is accounted for.
Cost pressures around ingredients as well as energy prices and labour shortages have also left many in a perilous position, said the trade body, which is urging the Chancellor to take lay out measures to tackle these issues in the upcoming Budget.
Kate Nicholls, chief executive, UKHospitality said: “These figures show the challenging position the sector is in. The demand from the public is quite clearly there, with revenue exceeding pre-Covid levels, but there is no way venues can take advantage of this demand as they drown amidst price rise after price rise.
“Without action, we can see just how stark the year ahead could be with a third of businesses at risk of failure. Venues are simply unable to pass prices onto the consumer at the same rate they are experiencing their own costs rise.
“If the Chancellor wants to stem the bleeding in hospitality and stop those prices rises, which unfortunately contribute to inflation, he can take action in the Budget.”
UKHospitality is calling for intervention in the energy market, Apprenticeship Levy reform and a new business rates multiplier to provide an immediate boost to the sector and prevent business failures, allowing those that survive to invest, employ and grow.
