Business rates will continue to be a burden for the hospitality sector, despite a promising drop in inflation last month.
Inflation hit its lowest level in over two years, falling to 3.9% in November, down from 4.6% in October.
However, the financial strain on pubs and brewers remains difficult for many, says Emma McClarkin, chief of the British Beer and Pub Association.
She says that while the fall in inflation will be a relief for some businesses, the increase in the standard business rates multiplier by 6.7% is still set to be a significant challenge, on top of additional inflationary costs, even at a lower level.
“Whilst today’s news of overall inflation continuing to fall is positive, the hospitality sector is still not feeling the benefit of this. Across our supply chain, and especially for food and energy, our costs continue to rise”, McClarkin said.
“We need to see inflation continue to fall, in all areas of the economy, in the next quarter to ensure that all of Britain’s pubs can reach profitability and, therefore, stability in 2024”, she added.
Meanwhile, UKHospitality Chief Executive Kate Nicholls warned that although consistent reductions in the overall rate of inflation is good news for the economy, it will feel “far from reality” for many hospitality businesses.
“Venues continue to feel the pain of energy, food and drink costs that continue to rise at a far higher rate”, she said.
This will be compounded in April when business rates rise yet again, said Nicholls, for the vast majority, putting further pressure on consumer prices and risking an unwanted inflationary spike.
“We’re urging the Government to reconsider it’s decision to put up business rates by over 6% in England and instead use the forecasted April rate of inflation of 3%, which would relieve some pain for businesses”, she added.
