Pub closures increased to the highest level in over a decade last year, as 769 businesses entered insolvency, up from 518 in 2022, according to research by accountancy firm Price Bailey.
The data, which was obtained under the Freedom of Information Act, revealed that 769 pub businesses entered insolvency in 2023, up from 518 in 2022. This equates to an average of 2.1 closures a day, up from 1.4 per day in 2022.
However, the figures donot account for the closures of individual pubs by managed groups that did not enter insolvency. In total, there were 38,175 pubs in the UK at the end of 2023, down from 41,015 a decade earlier.
Price Bailey said a convergence of ufavourable factors was affecting the hospitality sector, including the high cost of energy, labour and wholesale food and drink.
Pub goers disposable income has been squeezed, the firm said, while the industry was also hit by interest rates rising to a 5.25% peak by the end of 2023, and the government’s £18bn energy support package for businesses tapering off from the end of Q1.
“While there are some glimmers of hope, underlying trading conditions remain challenging and rising labour costs continue to exert strong pressure on margins,” said Matt Howard, head of Price Bailey’s insolvency and recovery team.
“The inflation rate for pubs crept up again in January and hopes of an early rate cut appear to be receding. The first quarter is a much slower trading period for pubs, and while sales growth was impressive in December, many pubs are struggling to turn a profit.
“Many pub businesses piled up barely manageable levels of debt during the pandemic lockdowns and rate hikes are tipping an increasing number into the red. The longer rates stay at current levels, the more pubs are likely to close their doors for good.”
But on a more positive note, he added: “Even though many large pub chains and independent pubs are struggling, innovative new market entrants, such as pubs owned by craft breweries, and theme pubs, such as the Boom Battle Bar chain, are successfully shaking up the industry.”
Source: CLH
