With costs skyrocketing and sales plunging, the spending-power crisis is hitting Britain’s iconic pubs hard, causing bankruptcies in the sector to soar by 83% in one year, according to the UHY Hacker Young firm of chartered accountants.
After a difficult period during the pandemic, many pubs and bars are left with very little savings or ability to borrow further, and for some, the current economic downturn has been the latest push towards insolvency, the British firm said in a statement on Monday.
During the pandemic, government support had kept many businesses on life support, but in 2022, 512 pubs filed for bankruptcy, up from 280 the previous year, during a period when energy prices soared, straining business budgets, UHY Hacker Young said.
At the same time, the cost-of-living crisis has affected consumer habits, making people less likely to spend on non-essentials, the firm continued. Railway strikes over pay, which have increased in recent months across the UK, have also turned customers away from town-centre pubs.
The number of pubs had been slowly declining across the country for several decades, but recent shocks such as the pandemic and the energy crisis have put these establishments under more pressure than ever, according to the British Beer and Pub Association (BBPA).
Ahead of the budget presentation to the UK Parliament on 15 March, the BBPA has called on the government in London to invest in pubs and breweries now, including through a more favourable tax regime, or lose them forever, .
