Nearly half of pubs and bars across Scotland plan to reduce their opening hours and one in 10 expect to close completely this winter because they can’t afford to continue trading.
A new snapshot survey of the sector by the Scottish Licensed Trade Association (SLTA) further reveals that 5 per cent of outlets have not re-opened since the Covid lockdowns, while half are trading at significantly lower levels than prior to the pandemic. Recruitment in the wake of Brexit remains an issue, with 40% employing significantly fewer staff.
Given these “unprecedented challenges” the SLTA is calling for additional support for the sector. Managing director Colin Wilkinson said the figures show that nine out of 10 outlets will need Government assistance to survive the winter.
“For many outlets it won’t be economically viable to remain open and one in 10 of our respondents plan to close during the winter months and nearly one in two expect to reduce opening hours,” Mr Wilkinson said. “Our sector is a crucial part of the tourism industry and reduced opening hours will have a knock-on impact for Scotland’s wider food and drink sector, and for employment within the sector.
“Our pubs and bars have worked very hard post-Covid and Brexit to showcase Scotland’s hospitality industry, but with a tsunami of rising costs and low consumer confidence we urgently call on local and national governments to help us through the winter. We must protect the jobs that outlets provide directly and the associated jobs in the wholesaling, brewing, distilling and food-producing sectors.”
The figures come as a UK-wide survey from virtual delivery platform Peckwater Brands found that only 59% of pub owners are confident their establishment will still be open in 12 months’ time. Less than two-fifths have confidence in the government’s support for the hospitality sector.
“Rising costs and reduced consumer spending pose serious threats to many UK pubs, and the results of our first ‘The Local’ survey show just how challenging the current climate is,” Peckwater chief executive Sam Martin said. “Confidence is low; the outlook for many pubs is somewhat bleak.”
Wholesale gas and electricity costs for UK businesses have been capped for six months, but the Federation of Small Businesses has said this will not affect the high standing charges imposed by suppliers. Firms have also warned that the “cliff-edge” when the six months of help finishes at the end of March does not provide long-term security.
Sweeping tax cuts in last week’s “mini-Budget” also failed to include measures which the hospitality sector and others were hoping for. Among those items overlooked were cuts to business rates and VAT levies.
Mr Wilkinson said half of all hospitality outlets in Scotland are still carrying “significant” debts from Covid loans taken out to stay afloat during the lockdown period of the pandemic. With energy costs also rising at an unprecedented rate, 45% of outlets across the country expect to reduce their opening hours this coming winter.
“Many of our respondents are still carrying significant Covid debt and are dealing with the challenges of Brexit, but we are now facing even bigger hurdles with rising costs, staff shortages and enormous increases to energy costs, with one in four anticipating an increase in energy costs of over 500%, despite the Chancellor’s announcement on capping wholesale energy prices,” Mr Wilkinson said.
He added: “Our snapshot survey covers all types of licensed premises and is an indicator of the key issues facing a wide rage of small to large businesses which trade within the wider hospitality sector.
“Our survey is based on quantitative research from over 600 outlets covering the length and breadth of the country and is supported by major food and drink chains and independent pubs, bars and hotels in Scotland’s hospitality sector.”