Thousands of bars, restaurants and pubs across the UK are pulling down their shutters for the final time as spiraling ground rents, production costs and no-show bookings continue to plague the sector.
There were more than ten closures every day, according to industry data, which showed the number of licensed premises in Britain fell by 3.6 per cent from 103,682 to 99,916 in the year to September.
This is the first time that the total has fallen below 100,000, according to the latest figures from AlixPartners and CGA/NielsenIQ.
The hospitality industry says it is crumbling under the collective pressure of rising energy, rent and food bills, staff shortages and no-show bookings, amid the ongoing cost of living crisis and the aftermath of Covid and Brexit.
Celebrity chef and restaurateur Tom Kerridge shared it The independent the hospitality sector is facing "some huge problems", with his business having lost more than £1m since the coronavirus crisis hit.
Post-Brexit, the TV chef said food inflation and staffing levels have both been major problems, with staff shortages pushing labor costs up to unaffordable rates. However, he said: "The biggest pressure that has put people over the edge is energy costs."
Kerridge's flagship restaurant The Hand & Flowers, in Marlow, the only pub in Britain with two Michelin stars, saw a 700 per cent increase in energy bills last year, he said.
These strains have had a "huge effect" on his business, which includes seven restaurants and pubs. The country has lost more than £1 million since the start of the pandemic, he said, plus twice as much in accounting losses that it is currently trying to recoup.
Martin McTague, national chairman of the Federation of Small Businesses (FSB), said: "Rising rents and input costs, coupled with inflation, high energy prices and low consumer demand, have affected the hospitality sector to such an extent that more than half of small businesses in the sector are facing declining revenues and record lows in confidence. Labor costs are rising due to labor shortages, the increase in the national living wage and upcoming changes to pension legislation are all contributing to the burden."
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Of the major sectors, hospitality companies had the lowest confidence in accommodation and food service activities with -31.1 points, according to FSB's smallbBusiness index in the third quarter of 2023.
The organization's research also shows that more than half (56 percent) of small catering businesses have experienced a significant increase in their operating costs in the past year - of more than 10 percent.
Kerridge believes most restaurants, bars and pubs are just hoping to break even by the end of the year, and warns that many independent restaurants will soon be forced to close. "It's absolutely suffocating us," he said. "The industry needs help, and it needs help quickly."
The same day last week, two high-profile restaurants announced they would be closing their doors due to crippling costs.
Simon Rimmer, 60, Channel 4 co-presenter Sunday brunch called last Tuesday a 'heartbreaking day' as he confirmed the closure of his vegetarian restaurant Greens in West Didsbury, Manchester, 33 years after he opened it with friend Simon Connolly.
He posted a video on Twitter/ .
Tony Rodd, that one Chef finalist in 2015, described how "devastated" and "heartbroken" he and his team are when he similarly announced the closure of his restaurant Copper & Ink in Blackheath, London on January 2.
In a video on Twitter/X, Rodd also predicted the closure of many more independent restaurants in the near future, as the hospitality industry buckles under the combined stresses of Covid, Brexit, the cost of living crisis and rising energy bills.
Jane Pendlebury, CEO of the Hospitality Professionals Association (Hospa), described the closure of numerous hospitality businesses in the UK as 'truly disheartening' and blamed the ongoing financial pressures facing the sector.
She said: "Rising food prices, rising energy costs and the inability to recruit sufficient staff are all common features of the current hospitality landscape, and are sadly forcing entrepreneurs to close their doors for good. The ongoing cost of living crisis in Britain is only exacerbating these problems, making it increasingly difficult for businesses to maintain their viability - while also having a huge impact on consumers' spending habits. Further complicating matters is the significant impact of no-shows on bookings, which poses a significant challenge for hospitality businesses."
Research by the House of Commons Library commissioned by the Liberal Democrats showed in December that almost 5,000 more catering and retail businesses have closed compared to those that opened in the first nine months of the year.
Sarah Olney, the party's business and finance spokesperson, warned that Britain's once busy high streets have turned into "ghost towns".
She said The independent: "Far too many cafés, restaurants and cafes are closing their doors for the last time due to sky-high energy bills, borrowing costs and staff shortages. Our high streets are being turned into ghost towns because this Conservative government is not listening to their concerns.
"Rather than risk more hospitality closures, ministers should give small businesses the boost they need by reforming business rates; tackling skills shortages and helping businesses trade internationally by reducing red tape and paperwork."
Kerridge criticized the government for prioritizing the wrong areas and channeling wasted money into 'ridiculous' projects. Meanwhile, industries such as the hospitality industry are being 'exhausted' and 'left behind'. He called on the government to halve VAT rates from the current 20 percent, saying: "That 10 percent [reduction would be a] huge difference for businesses - that's the difference between surviving and staying open, or closing. It's a relief from the pressure."
Pendlebury said Hospa supports UKHospitality's call for a VAT cut to help the sector keep prices down and get back on its feet. She urged an extension of the government-mandated business rates cut, which she said could help prevent a 7 percent rise in bills in March. She also advised business owners to maximize their use of technology for greater automation.
Mr McTague is calling on the Government to look at employment costs and help small employers through policies such as increases in the Employment Allowance, and raising the VAT threshold to £100,000.
A government spokesperson said: "During the autumn statement, the Chancellor announced more than £4 billion in support for small businesses and the hospitality sector, including a 75 per cent cut in business rates and a freeze on alcohol duty.
"In 2021, we published the UK's first hospitality strategy to improve the sector's resilience and established a hospitality sector council to oversee its implementation. We are working closely with the sector to address the challenges it faces, and we will continue to help them grow and prosper in their local communities."
They added that the small business multiplier will be frozen at 49.9p for the fourth year in a row.
