Just over one third of hospitality businesses in the UK are currently turning a profit amid a cocktail of hefty cost increases.
Only 37 per cent of restaurant and bar firms are profitable, according to figures from industry bodies the British Beer and Pub Association, British Institute of Innkeeping and UKHospitality.
Bosses pointed to sky-high increases in costs for energy, goods and labour over the past few months.
Almost half (45 per cent) of hospitality bosses had been forced to slash opening hours to dodge permanent closure while one in six said they had no cash reserves.
“In the past few weeks inflation has hit record levels and costs on key ingredients and utilities has rocketed, whilst consumer confidence has plummeted resulting in fewer customers in our venues,” a joint statement from the industry bodies stated.
The groups called on the government for “relief as soon as possible” in order to prevent the closure of further venues.
Pub bosses have admitted they have been forced to swap out pricier fish and meat products for cheaper alternatives in recent months, such as menu adjustments swapping salmon out for trout.
Many businesses have hiked prices for consumers this year all while customers themselves are also facing rapidly increasing household bills.
Some industry voices, including the nighttime economy adviser for Greater Manchester Sacha Lord, have called for a return to the 12.5 per cent VAT rate for hospitality.