UK’s independent pubs on the brink as costs spiral

Staffing shortages and cost pressures are hitting the UK’s almost 40,000 independent pubs hard, forcing them to cut trading hours and putting their future in peril, according to a major industry survey.

Some 15 per cent of independent pub operators said their business is no longer viable, predicting they would have to close permanently, and around half have had to reduce trading hours because of a lack of staff, according to a survey of 207 businesses commissioned by the trade body the British Institute of Innkeeping.

Around three-quarters of independent pubs have vacancies they are struggling to fill, the survey conducted in early July found. Nearly one quarter have had to close their doors for one or more usual trading days because of staffing shortages.

Steven Alton, the chief executive of the trade body, said independent pubs were “currently under threat from the exceptionally tough trading conditions that they are battling”.

The majority of BII members are single pub operators, who either run a leased business, have a tenancy with a pub chain, from which they must purchase beer, or own a freehold property. There are roughly 36,000 independent pubs in the UK, according to the BII.

The warning from smaller, independent pubs comes days after JD Wetherspoon, an 860-site pub chain known for its tight cost control, said that rising labour costs would push it to a larger-than-expected loss this year.

In a letter to the new chancellor Nadhim Zahawi, seen by the Financial Times, Alton called on the government to cancel business rates for pubs next financial year and cut beer and cider duties, among a suite of measures, to help independent traders survive.

“Without support we will lose the opportunity for growth and regeneration, we will lose pubs from the heart of their communities, and we will lose something very special in our nation’s unique heritage and culture,” wrote Alton.

The survey found 43 per cent of pub operators said they had faced cost increases of more than 20 per cent, more than double the rate of inflation.

Almost half said their profits were down more than 30 per cent in the first six months of the year, compared with the same period in 2019, in large part because of a rise in food, drink and energy costs.

The BII’s findings “graphically illustrate the unprecedented pressures being faced for our independent community pubs”, said Kate Nicholls, chief executive of the industry body UK Hospitality.

Nicholls said pubs were facing “a toxic cocktail” of waning sales, staff shortages and cost pressures. “Without intervention to reduce the cost of trading, removing regulatory blockers to growth and filling job vacancies, many of these businesses — particularly smaller or independent businesses without big finance behind them — will not survive,” she said.

David Hage, director of the Secret Pub company, which operates three sites across Nottinghamshire and has around 70 employees, said he was trying to fill two chef roles, adding that applicants were “demanding higher salaries”.

“Sales and business are good right now. It always is in the summer months,” added Hage. “The true test for our industry and our pubs will come in the autumn and winter months, when sales naturally reduce, but the increased costs will remain.”