Are you too young to know who Wile E. Coyote is? An hungry animated Warner Bros predator with a fixation on a Road Runner dinner was systematically destroyed on a daily basis on our screens, as he fecklessly pursued his prey in the 80s and 90s. He would be sliced into pieces by a sharpened cattle grid, run over by trucks, bounced over cliffs by rocks, exploded by dynamite ... only to get up and be hit on the head by an Acme anvil as he clambered to his feet.
But that is nothing compared to the hospitality industry in the UK. As if pubs aren't in enough trouble already, the Chartered Institute of Personnel and Development said today (Monday 13 February) that more than half of British businesses expect to raise pay again in 2023 to “stay competitive”. Apparently, the expectation among employers is that pay will rise, on average, by another 5 per cent in 2023, according to the institute’s latest quarterly employment report. All of this means that the cost of a burger in Neil's local may increase yet further to £51, with not a Wagyu cow in sight.
UHY Hacker Young have been analysing Insolvency Service data and announced over the weekend that pub and bar insolvencies across the UK were near the highest level in a decade with more than 500 businesses folding last year, as hospitality venues struggled with rising costs and tepid demand. Some 512 companies went out of business in 2022, up 56 per cent from the previous year when pandemic-related business support stopped a wave of insolvencies.
Those who haven't heard complaints from small businesses haven't been half-listening, as there has been a constant whine emanating from restaurants, bars, small shops and tiny hostelries since the end of last year about the Government's £18 billion energy support package for business “tapering away” from the end of March.
The Government will extend the scheme for another year from April, but is slashing the level of support it gives to businesses and put the total cost of the revised package at £5.5 billion. Companies facing particularly high bills will receive a unit discount of £6.97 per MWh for gas and £19.61 per MWh for electricity under the replacement scheme.
Steve Alton, the chief executive of the British Institute is no stranger to hyperbole and went for the linguistic throat with the statement: “Energy costs are simply a pub killer.”
For the sake of balance it is worth noting that wholesale gas prices have fallen nearly fivefold since their late August peak and wholesale electricity prices are down fourfold from their late September peak. This is whilst the price of sausage and mash has more than quintupled since the pandemic, with the cost of fish in beer-batter and triple fried chips equalling that of a small family bungalow in the north-west.
