Brakspear chief executive Tom Davies has described the threat of business rates rises as the ‘Sword of Damocles’ hanging over the sector.
The planned inflation-linked rise in business rates in April 2024 will see the sector collectively pay an additional £234m, according to UKHospitality.
Davies told The Morning Advertiser: “The impending business rates rise next year is something that’s on everyone’s radar and it’s hugely worrying for the industry.
“We’ve kept our head above the water and I think we’ve done very well doing that, but it feels like the Sword of Damocles is holding over us and we just need some clarity about where that’s going.
“Having said that, turnover is OK but profitability is really tough.”
While customers are still spending, a combination of food and drink inflation as well as premises and energy costs means the bottom line is under pressure, according to Davies.
Summer trade for the c125-strong Oxford-based pub operator was “disappointing” due to wet weather in July and August, albeit June and September were stronger.
“The weather in September meant trade was fairly good but the impact isn’t as great when the sun comes out in July or August. It’s like having a brilliantly hot Monday. It’s better than an average Monday but it’s never going to be like having a hot Saturday.
“It’s never going to quite make up for July and August. Trade is holding up but what we’re finding in [managed pubs division] Honeycomb Houses is we’re serving more customers but the spend per head is down.”
However, Davies remains optimistic for a strong Christmas trading period.
This interview originally appeared in The Morning Advertiser.
