Operators 'in deeper trouble now than during pandemic' as utility bills triple

By James McAllister

- Last updated on GMT

Hospitality operators 'in deeper trouble now than during pandemic' as utility energy bills triple Sacha Lord WOOD Manchester Simon Wood

Related tags Inflation Energy Government Sacha Lord

Pubs, restaurants and bars are seeing outgoings triple, and are in deeper trouble now than during the pandemic, one of the UK's Night Time Economy Advisors has said

Sacha Lord, the Night Time Economy Advisor for Greater Manchester, told Sky News ​this morning (9 August) that the combined damage of soaring inflation, energy bills, supply chain difficulties and wage increases, have led to a 'perfect storm tearing through the heart of the sector' and has called for the Government's urgent return to Parliament. 

"This is a crisis and we need immediate intervention," Lord said.

"We need somebody to get a grip and we need strong leadership to get us through this."

Lord reports energy bills in some hospitality venues have tripled, with many expecting extra costs of between £15,000 to £20,000 by the end of the year. 

One Manchester restaurant, WOOD Manchester, managed by former MasterChef winner Simon Wood, has reported an increase from £3,000 per month to nearly £9,000 per month for utilities, despite opening only five days per week.

"The hospitality sector is one of the most integral parts of the UK economy, and one which is now in an extremely perilous position, more so than during the Covid pandemic," Lord continued.

"Historical debt burdens racked up over the past two years, combined with the unrelenting economic pressures have created a perfect storm which is tearing through the heart of the sector. Trading is now unviable for many and I believe we will see closures at an unprecedented level over the 12 months leading to unemployment on an unimaginable scale.

"The speed at which the economic turmoil has devastated businesses in the sector is frightening and I am being contacted every day from landlords who are unable to continue to trade due to financial pressures."

Lord is calling for the Government to implement a temporary reduction in VAT on business energy bills from 20% to 5%, and has contacted Chancellor Nadhim Zahawi to urge him and the Government to return to Parliament.

"I have contacted the Chancellor, Nadhim Zahawi MP, to urge him and the Government to return to Parliament. Urgent meetings with energy providers and leaders from across the industry are needed to discuss pragmatic solutions and reduce the financial burdens that landlords are facing.

"We must keep this sector afloat before it is too late, and to save the livelihoods of the hundreds of thousands of staff that the sector employs."

Lord's latest intervention comes as concerns grow about drought conditions in many parts of the UK, amid a fifth consecutive month of double-digit percentage inflation​.

The latest CGA Prestige Foodservice Index, published yesterday, reveals that the foodservice sector reached 11.5% in June. All 10 food and drink categories in the Index moved upwards year-on-year, with three — fruit, dairy, and oils and fats — recording inflation of more than 20%.

Related news

Show more

Follow us

Hospitality Guides

View more