Mark Wrigley, owner of Atlas Bar in Manchester, said he is “truly scared” by the cost increases. These increasing costs are killing his business and the whole hospitality industry. Like thousands of bar and restaurant owners across the country, he’s feeling the financial pinch. Skyrocketing ingredient costs, energy bills, and the recent jump in the minimum wage have them feeling the squeeze. To offset his costs, Wrigley has gone so far as to stop paying himself.
These business owners have been forced to spend more money on employee wages as a result of the minimum wage hike. This change went into effect this past April. This new financial squeeze is hitting transit agencies when other operating expenses are skyrocketing as well. In the UK, a recent report shows that costs increased 3.8% in the year ending in July. That surge was primarily driven by the biggest jumps in air fare and food prices.
The trend for job openings in the hospitality sector overall has been steadily decreasing, with a drop of more than 164,000 openings from May to July. Instead, the measure of all-paying jobs on payroll has plunged in 10 of the past 12 months. The bulk of these declines have been focused on the hospitality and retail sectors. UKHospitality, which represents over 123,000 venues across the country, noted that the sector accounted for 53% of all job losses in the UK during this challenging period.
Wrigley emphasized the irony of being the largest contributors to government coffers and being left out to dry during their own challenging times.
“We probably generate £300,000 or £400,000 for government, from this one business, and yet I get nothing from it.” – Mark Wrigley
The challenges facing hospitality businesses are exacerbated by rising taxes announced by Chancellor Rachel Reeves, which have slowed down investment and hiring in the sector. Speaking to Portcullis House on Thursday, Kate Nicholls, chief executive of UKHospitality, laid out the most shocking trends coming out of industry.
“What we’re seeing at the moment is a third of businesses cutting their opening hours, one in eight saying that they’re closing sites, and 60% saying they are cutting staff numbers,” – Kate Nicholls
Liz McKeown, a spokesman for industry group UKHospitality, recently summed up the industry’s outlook. She admitted that payroll numbers have been rolling over for three months and escalating downward.
“The number of employees on payroll has now fallen in 10 of the last 12 months, with these falls concentrated in hospitality and retail,” – Liz McKeown
In response to the proposal, UKHospitality is urging the government to act immediately. Like us, they’re looking to ease the financial burdens that businesses are currently experiencing from continued disruption. They’re calling on the government to cut business rates and VAT. This action is a much-needed first step to shore up an important economic foundation for our communities.
The government has previously outlined measures to protect measure businesses. These such as c , , but many hospitality businesses owners believe that these measures do not come close to solving the crushing financial pressures being placed upon them.
A Treasury spokesperson reiterated their commitment to supporting the sector:
“Pubs, cafes and restaurants are vital to local communities, that’s why we’re cutting the cost of licensing, helping more pubs, cafes and restaurants offer pavement drinks and al fresco dining, and extending business rates relief for these businesses – on top of cutting alcohol duty on draught pints and capping corporation tax.” – Treasury spokesperson