Pub and bar company insolvencies jump by 83% in past year to 512
Insolvencies of pub and bar companies have increased by 83% in the past year*, from 280 in 2020/21, to 512, says UHY Hacker Young, the national accountancy group.
Pub and bar companies have faced increasing costs and concerns over falling sales. Energy prices have soared and hit pub companies’ wallets hard throughout the winter after the government removed support for businesses’ energy bills.
The cost-of-living crisis, including interest rate rises, has impacted consumer habits, making them less likely to spend on ‘non-essentials’, including a drink or a meal at a pub. Rail strikes have also prevented many customers from travelling to pubs in town or city centres.
At the same time, inflation has pushed up the prices that pubs need to pay for beer and food.
Following a difficult pandemic period, many pub and bar companies have very little by way of savings or capacity to borrow more. For some pub company owners, the current economic downturn has been the final push into insolvency.
Peter Kubik, Partner at UHY Hacker Young, says: “It’s deeply concerning that so many pubs and bars are closing their doors. In addition to the financial consequences for owners and employees, the loss of a pub can be felt quite keenly by the community.
“This is a particularly difficult period for pub and bar owners, who find they need to spend more and more while earning less and less. Following an extended period of lost revenues during the pandemic, the cost-of-living crisis has been the final nail in the coffin for many.
“Perhaps the government should consider what it can do to alleviate pressures, for instance, by extending the energy bill relief scheme for the hospitality sector.”
*December 31 year end