The number of pub and bar businesses checking last orders has risen by more than 180 percent in a year amid rising costs and falling sales, new figures show.
The number of bankruptcies rose to 512 last year from 280 in 2021, accounting firm UHY Hacker Young said, as a survey found nearly a quarter of pub businesses could be put out of business after just three bad months.
The cost of living crisis and interest rate hikes have hampered customers’ spending on drinks and meals in pubs, while rail strikes have prevented customers from traveling to city centres, a report said.
After years of intermittent Covid lockdowns and social restrictions, many pub and bar businesses have very little savings or the ability to borrow more. For some, the economic downturn was the last push into bankruptcy, the auditing firm said.
UHY Hacker Young’s Peter Kubik said: “It is deeply concerning that so many pubs and bars are closing their doors. In addition to the financial consequences for owners and employees, the loss of a pub in the community is felt quite strongly.
“This is a particularly difficult time for pub and bar owners who are finding they have to spend more and more while making less and less.”
He added: “Perhaps the government should consider what it can do to ease the pressure, for example by expanding the energy bill relief program for the hospitality sector.”
Despite the aid scheme, pubs and restaurants have reduced opening hours this winter to save on bills during quiet times, industry bodies report.
The Treasury announced last month that support for companies would be cut sharply from the end of March if the global gas price crisis eases.
Despite falling bills, pubs are likely to still struggle as the new system is only expected to pay out around 6 per cent of the current monthly maximum of £3,100.
Trade representatives, UKHospitality, Hospitality Ulster, the British Beer and Pub Association and the British Institute of Innkeeping, asked for further support in a joint letter this week to Grant Shapps, who has taken charge of the new Department for Energy Security.
Pubs will head into the spring with bills at least three and a half times what they were last year, they said.
A joint poll of members found that one in three pub businesses is at risk of failure over the next year and one in six is trying to weather the economic storm without cash reserves.
About 23 percent of members said they had less than three months’ reserves left.
Some positive figures have emerged from industry monitor CGA’s latest sales survey, which showed pubs sold more drinks each week in January than at the same time last year.
However, the CGA noted the UK was not entirely free of Covid restrictions in early 2022 and despite higher sales, sluggish weekend numbers suggest bettors are avoiding costly evenings.