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The CEO of UKHospitality has warned that 10,000 pubs and restaurants could face closure in light of rising inflation, energy costs and rents across the industry.
Kate Nicholls told the Mail on Sunday that the hospitality sector was now facing “as big a crisis, if not bigger”, since the pandemic.
She said: “We’re already seeing a lot of independent operators handing in the keys and walking away. I’ve never seen such a toxic cocktail of costs. It is a perfect storm.”
She also estimated that 20,000 of UKHospitality members were still operating businesses below break-even, while 30,000 have no cash reserves.
It comes as UK inflation recently hit its highest level in 40 years last April, driven by the rising cost of energy bills.
The figure, according to the figures from the Office of National Statistics (ONS), was up from 7% in March.
The ONS said that around 75% of the increase was driven by the 54% increase in the energy price cap which came into force at the start of the month.
There was also a large upward contribution to change (of 0.11 percentage points) from restaurants and hotels. Overall, prices rose by 1.7% between March and April 2022, compared with 0.7% a year earlier.
The upward effect came largely from restaurants, cafes and dancing establishments, where all items in the basket increased in price. This is consistent with the increase in Value Added Tax (VAT) from 12.5% to 20% on 1 April 2022.
