Rapidly escalating energy bills are killing pubs, says BII

The British Institute of Innkeeping (BII) has written to the secretary of state for BEIS and the chancellor to highlight the “devastating” impact of the energy crisis on its members running independent pub businesses and calling for urgent, essential support from the government.

The news comes as licensees across the UK are dealing with a “lethal” cocktail of inflationary costs, staff shortages and squeezing of consumer confidence, all whilst trying to recover from the devastating impact of the pandemic.  

In a recent survey of members, the BII revealed that the rising energy costs topped the list of factors impacting the profitability of their pub businesses, but in the few short weeks since then, the crisis has escalated even further.

Unlike the increases in energy bills for the public, there is currently no cap in place for businesses, and many BII members are regularly reporting increases of 300% or more on their existing payments. Even without inflation across all other areas, the energy crisis alone is said to threaten the survival of great pub businesses that have been at the heart of communities.  

It is reported that as a result independent pub operators will need to trade at least 20% higher than pre-pandemic levels to “just stand still”, in spite of the fact that a quarter are still trading below 2019 levels. 86% of those surveyed reported lower profits from their already reduced revenue. 

In addition, many are still repaying Government Bounce Back loans and other pandemic specific debts at an average of around £40,000 per pub.  

Steve Alton, CEO of the BII, said: “Our members have been working tirelessly to maintain pubs as accessible and affordable safe spaces for all, at the heart of their communities across the UK, absorbing as much of the inflationary costs placed on their businesses as possible. 

“We have seen a sharp rise in calls to our helplines, with members uncertain of how to navigate the challenges facing them, the majority of whom are seeing unsustainable cost increases across every area of their businesses.” 

He added: “We have called on the government for urgent short-term support to allow these vital businesses, supporting local jobs and livelihoods in every community, to weather these exceptional costs of doing business. They now urgently need immediate support with energy bills via grants and a cap on future increases. 

“Alongside these measures, there need to be measures in place to stimulate consumer spending, all of which will allow them time to start their recovery. Pubs are an essential component of growth, regeneration and levelling up across the UK and without support, their contribution to skilled jobs, local investment and supporting local suppliers will be lost, in many cases, forever. The government must act now to ensure the survival of these vital community businesses.”