Continued concerns over energy prices

25 June, 2024

Only a third of hospitality businesses are optimistic about their future - as average energy prices rise by 81%.

A recent survey found that just 29% of leisure and hospitality business operators feel optimistic about the next 12 months.

Pubs, bars and restaurants say their energy prices have surged by an average of 81% over the past year, on top of rising food and wage bills.

Wholesale gas prices increased following the conflict between Russia and Ukraine but these have since dipped to their lowest levels since the conflict started in February 2022.

However, with retail prices still falling back into line - and with some pubs and restaurants locked into long-term fixed rate contracts - just 29% of businesses say they feel optimistic about the next 12 months.

Operators have commented that pubs, bars and restaurants have been at "breaking point for a year now" and warn venues will shut for good if cost pressures do not ease soon.

Four of the UK's largest hospitality industry groups - the British Institute of Innkeeping, UKHospitality, the British Beer and Pub Association and Hospitality Ulster - have issued a plea to the government for more support.

In a statement, they say:

"The Energy Bill Relief Scheme has provided a short respite but with that falling away last month businesses are back to paying high costs, with no end in sight for the thousands locked into contracts who will be obligated to pay extortionate rates well into next year.

"The government must recognise this crisis isn't just crippling businesses now.

"Left unresolved it will have a lasting wider impact long into the future, impacting local employment, supply chains and removing essential community hubs from villages, towns and cities across the whole of the UK."

It comes as data collected by CGA by NielsenIQ on behalf of the groups reveals that 86% of hospitality firms are worried about energy costs going forward.

Last month, analysis of official Government data by a commercial real estate specialist found more than 150 pubs have closed in England and Wales over the first three months of 2023. This represents a 60% jump on levels from last year.

"Put simply, this data is extremely worrying for thousands of otherwise viable hospitality businesses," the groups say.

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