Is Brexit Eating the Hospitality Sector?
It’s summertime in the UK, usually a key money-spinning time for the hospitality sector, but despite the influx of big-spending tourists, all is not well beneath the surface.
Post-Brexit turbulence is exerting financial pressures on hoteliers, publicans and restaurateurs. And there are regulatory changes to contend with too. These factors combined have all the makings of a ‘perfect storm’, experts believe.
Here’s a breakdown of the challenges the hospitality sector is currently facing:
1. The fall in the pound
The wavering of the pound post-Brexit has led to an inflation of food and drink costs. According to the Association of Licensed Multiple Retailers (ALMR), food prices have risen by 9% while drink costs have risen by 7%. The ALMR represents 90% of all restaurants, pubs and bars in the UK. According to their survey, only 4% of owners felt they could pass on cost increases to their customers through higher prices. Most feared that this move would irrevocably damage their business.
2. The introduction of the national living wage
Last year saw the introduction of the National Living Wage for over 25s. A measure which will see wages rise to £9 by April 2020. They have already risen to £7.20. In the wake of Brexit’s uncertainty, this is yet another financial strain for business owners.
3. The decline in workforce numbers
The hospitality industry relies heavily on foreign workers to fill chef, waiter and barman vacancies. Following Brexit, there has been a dip in the influx of foreign workers. A recent announcement that a detailed report will be carried out analysing the relationship between migration and the British economy has been met with support by the chief executives of the BBPA and ALMR.
These changeable times have already produced some casualties within the hospitality industry. London-based Affinity Bars & Restaurants has closed four of its venues. Meanwhile burger chain Handmade Burger Co has gone into administration and Byron is considering scaling back its operations.
To keep up to date on how the current climate could affect your business, make sure to visit: http://restaurant-property.co.uk/< Back