The UK government has increased the number of alcohol licences, bringing the total to 99,868 – nearly the same as this time last year, according to CGA’s Hospitality Market Monitor. However, the move comes amid growing concerns for the struggling hospitality sector, exacerbated by cost pressures outlined in the Autumn Budget. The UK’s hospitality sector is showing modest signs of recovery, with an increase in licensed premises for the second consecutive quarter. See more

The UK hospitality industry c. See moontributes significantly to the economy and faces unique challenges, including changing consumer behaviour, Brexit impacts, and cost-of-living crises

The Budget introduced higher employers’ National Insurance contributions and reduced business rates relief, adding to the financial strain on businesses. Recent data from the Office for National Statistics (ONS) also highlighted soaring wage costs, further squeezing profitability. Industry leaders are calling on the government for more support, fearing these rising expenses could undermine the sector’s recovery.

Independent businesses, in particular, are feeling the strain. The sector is now 15.9% smaller than it was before the pandemic in March 2020, though there have been encouraging signs of growth recently. The independent hospitality scene has expanded for two consecutive quarters, with site numbers rising by 0.7% in the three months up to September. Despite this, experts warn that the increasing costs might jeopardise the revival of smaller establishments and startups.

Karl Chessell, business unit director at CGA by NIQ, noted the sector’s resilience, saying, “Two successive quarters of growth in site numbers is an encouraging sign of hospitality’s strength in the face of major challenges.” While long-term economic indicators such as inflation and GDP are improving, he cautioned that looming labour and rates costs could stall progress.

Graeme Smith, managing director at AlixPartners, echoed this sentiment, stating that while recent figures show stability and growth, the sector remains on thin ice. He flagged the potential silver lining of the rising National Living Wage, suggesting it might boost consumer spending in the short term. Smith also noted that market churn could open up new opportunities for businesses looking to adapt.

The hospitality industry has shown real strength, but it still has big challenges to deal with. Without more help from the government, there’s a worry that the recent progress could slow down or even stop.

Source: Harpes.co.uk