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20 Feb, 2023 05:22

Energy costs threaten survival of UK pubs – report

The number of insolvencies surged over 80% last year, according to research data
Energy costs threaten survival of UK pubs – report

A growing number of British pubs are closing down due to rising energy bills and inflation, data published by accountancy firm UHY Hacker Young has shown.

According to the report, 512 pub and bar companies collapsed in the UK last year amid the cost-of-living crisis, up from 280 in 2021. The firm says the number of such insolvencies jumped as much as 83% in 2022.

The cost-of-living crisis, including interest rate rises, has impacted consumer habits, making them less likely to spend on ‘non-essentials’, including a drink or a meal at a pub. Rail strikes have also prevented many customers from travelling to pubs in town or city centers,” the report’s authors state.

Inflation is driving up costs that pubs themselves have to pay for beer and food supplies, the findings show. As many of the establishments have little to no savings or capacity to borrow following the Covid-19 pandemic lockdowns, more of them are being forced to close their doors.

This is a particularly difficult period for pub and bar owners, who find they need to spend more and more while earning less and less. Following an extended period of lost revenues during the pandemic, the cost-of-living crisis has been the final nail in the coffin for many,” said Peter Kubik, one of the analysts behind the report.

The news comes after the British government announced plans to slash the aid it provides to businesses and public sector organizations for the payment of energy bills.

The current Energy Bill Relief Scheme, which was introduced in September last year, has reportedly provided £18 billion ($22 billion) to businesses to help with soaring energy costs. However, the scheme comes to an end in March, and a new support package will reportedly see funding reduced to £5.5 billion ($6.7 billion).

The spiraling cost of energy has been our members’ number one concern for close to a year now and remains so… As this data demonstrates, there is no doubt that energy costs are causing businesses to fail – people simply cannot afford to make ends meet and are left with no choice but to shut up shop, meaning a community loses its pub or brewery, and the jobs and livelihoods that go with it, for good,” Emma McClarkin, CEO of the British Beer and Pub Association, told news outlet City A.M.

For more stories on economy & finance visit RT's business section

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