Christmas cheer not enough to save pubs from winter pain, sector warns

A festive boost in trading this Christmas will not be enough to save the UK pubs industry, sector heads have warned, as anxiety mounts about the state of the hospitality sector going into winter.  

Following pain at the end of last year, Emma McClarkin, chief executive of the British Beer and Pub Association, has urged the government to guarantee pubs will not face higher business rates next year, or further beer duties, and echoed calls for more regulation of the sector.

The industry boss warned that “without some let up in the myriad of costs they’re facing, a boost at Christmas won’t be enough to see many through into 2024 and beyond.”

“The implementation of recommendations to effectively regulate energy suppliers and ensure fair deals for businesses cannot come soon enough,” she told City A.M.

Unlike households, businesses are not protected by the energy price cap, meaning they are exposed to higher bills over long-term contracts than regular customers.

The hospitality sector also faces the looming prospect of no further support packages for energy bills over the Christmas period.

As it stands, businesses are supported through the Energy Bills Discount Scheme — which expires in April 2024 — which offers a limited and capped level of support for pubs and restaurants grappling with bills more than double pre-crisis levels. 

More than 32 pubs vanished from communities in England and Wales each month last year, according to data by real estate adviser Altus, as rocketing energy bills and staffing pressures forced businesses to shut for the final time.

Trade was also hampered by a cluster of rail strikes, which particularly affected London, as businesses missed out on commuters heading into the city to enjoy the festivities. 

“Thousands of businesses’ energy bills remain devastatingly high, and with colder months looming, many will be worried about how they’re going to keep their pubs as warm spaces for their community,” McClarkin said. 

Ofgem is asking the government to consider further protections in areas it doesn’t have the power to regulate, like energy brokers, and for businesses to be given access to the energy ombudsman to help settle disputes. 

However, any potential reforms are unlikely to be passed through legislation ahead of Christmas.

Anthony Ainsworth, chief operating officer at Npower Business Solutions, told City A.M. that businesses needed more help in reducing demand such as insulation and on-site generation.  

He said: “When it comes to business support, there needs to be a focus on both energy supply and reducing demand. Although there has been financial support for businesses to help them manage energy costs over the past year, a more long-term vision is needed. 

“As such more government support for businesses to help them reduce energy demand needs to be a key priority to help them both manage their energy consumption and support their sustainability ambitions.”

City A.M . has contacted the Department for Energy and Net Zero.