According to a survey, three out of four nightspots in the UK are on the verge of financial ruin.
The Night Time Industries Association (NTIA), which represents some 1,400 bars, clubs and music venues in the UK, flash poll found that three quarters of night time businesses face a ‘financial cliff edge’ .
In a press release, the NTIA said the results “give a clear indication of the current impact of inflation on [the] night economy and hospitality businesses across the UK. »
Inflation is currently 9.9% in the UK. Last month it hit the highest rate on record since the national statistics series began in 1997.
Conducted from September 16-18, the survey of more than 300 overnight businesses found that 47.7% of respondents barely broke even, while 24.8% said they were losing money.
40.6% of respondents said they would last no longer than 2-3 months if cost levels hold.
The NTIA said the industry “is facing a perfect storm between unsustainable cost increases and consumer market constraints, where consumers have less disposable income.”
“Businesses remain resilient but cannot hide frustration and anger as they again face uncertainty, leaving many businesses, employees and self-employed on the edge of a financial cliff,” he added. .
According to the survey, 80.6% of businesses saw a decline in footfall, while 82% experienced a decline in revenue over the last 3 months of business.
The findings come ahead of the UK government’s mini budget on Friday which is expected to outline policies aimed at curbing inflation and sending energy prices soaring.
NTIA CEO Michael Kill urged the Conservative government to make “immediate and large-scale interventions”, saying the industry was at a “point of crisis”.
“With many business owners and operators emotionally and mentally drained by over 3 years of uncertainty, questions are rightly being asked of the government and its plans for the sector,” he said.
“Time is running out fast, with hundreds of businesses already unable to cope, making irreversible decisions about their future, with thousands of jobs lost or at risk.”
Kill called for a substantial reduction in Value Added Tax (VAT), an extension of business rate relief and a significant energy price freeze for small and medium-sized businesses.
“On Friday we need a concise and detailed plan from the government on how it will support businesses through this crisis, nothing less than that is acceptable,” he added.
Energy prices have soared 80% in the UK, with households and businesses now paying the second highest amount for their gas and electricity in Europe.
The Lizz Truss government has said it will provide ‘vulnerable sectors’, such as hospitality, with extra help to cope with rapidly rising energy bills and inflation, although it will not has not yet detailed its plans.
The hospitality industry employs 2.53 million people in the UK, representing 7.1% of the country’s total employment.
The beleaguered industry has been hit in recent years by Covid and Brexit, although the exact impact of the two is debated.