End of freeze = profit squeeze!

The just announced 10% increase in duty on most wines and spirits, signifies the end of the alcohol duty freeze.

This is  now being factored into price increases in pubs and restaurants, exacerbating the impact of inflation on food prices, energy and staff costs on the sector.

This month, accountancy, firm, Price Bailey, recorded pub closures increasing by 80% in the past 12 months, a rate they described as “unheard of in more than a decade“.

They added that increasing interest rates are likely to accelerate failures as many pub businesses have piled up “barely manageable levels of debt… and  rate hikes are tipping an increased number into the red“.

The government’s efforts to curb inflation through interest rate rises are designed to reduce discretionary spending power, which will impact on restaurants and pubs, where disposable income falls have a concomitant impact on demand.

In my own research, for every 1% drop in disposable income, there is a 1% fall in restaurant demand.

Survival therefore will rely on businesses growing market share at the expense of competitors by offering great service, great value for money and clear differentiation.

These are fields in which we have a proven track record so now is a great time to get in touch…