The number of pub and bar companies has grown by more than 180 per cent in the past year amid rising costs and falling sales, new figures show.
Accountancy group UHY Hacker Young said bankruptcies are set to rise from 280 in 2021 to 512 last year, as a survey found nearly a quarter of pub firms could be put out of business after just three bad months.
A report said the living crisis and rising interest rates have constrained customer spending on drinks and food in pubs, while rail strikes have deterred punters from traveling into city centres.
After years of intermittent Covid lockdowns and social restrictions, many pub and bar companies have little to save or much to borrow. The accounting group said the economic downturn has been the final push into bankruptcy for some.
Peter Kubiak of UHY Hacker Young said: “It is deeply worrying that so many pubs and bars are closing their doors. In addition to the financial consequences for owners and staff, the loss of a pub is felt keenly by the community May go.
“This is a particularly difficult period for pub and bar owners, who are finding they need to spend more and more while earning less and less.”
He added: “Perhaps the government should consider what it can do to ease the pressure, for example by extending the Energy Bill Relief Scheme to the hospitality sector.”
Even with the relief scheme in place, this winter pubs and restaurants are cutting opening hours to save on bills in calmer times, industry bodies report.
The Treasury announced last month that support for businesses would be drastically cut from the end of March as the global gas price crisis eased.
Despite the fall in bills, pubs are still likely to struggle as the new scheme is set to pay only around 6 per cent of the current monthly maximum of £3,100.
Figures show many pubs are months away from running out of cash (PA)
Business representatives UK Hospitality, Hospitality Ulster, the British Beer and Pub Association and the British Institute of Innkeeping called for further support in a joint letter this week to Grant Shapps, who heads the government’s new department for energy security.
He said pubs are going into spring with bills at least three and a half times higher than last year.
A joint survey of members found one in three pub businesses are at risk of failure over the next year, with one in six trying to weather the economic storm without cash reserves.
Some 23 percent of members said they had less than three months of reserves left.
There have been some positive figures from industry monitor CGA’s latest sales survey, which showed pubs sold more drinks each week in January than the same time last year.
However, the CGA said the UK was not completely free of Covid restrictions in early 2022, and despite higher sales, flatlining weekend figures suggest punters are avoiding high-spending nights out.
