The Christmas spirit of a cheerless Scrooge is all that can be derived from the latest numbers on hospitality bankruptcies. A 5 per cent spike in this year’s butcher’s bill…and yet more predicted once new Budgetary costings come into play. Just how are hospitality businesses going to turn their fortunes around in 2025?
High-street pubs might well be preparing for the onset of their busy Christmas season, but the latest insolvency figures from tax and consultancy firm RSM UK haven’t exactly inspired much festive cheer this week: stats show that the number of bankruptcies within hospitality have jumped 5 per cent year-on-year.
The data, which covers the 12 months ending September 2024, detail 3,679 food services and accommodation businesses heading into insolvency: a marked increase on the 3,490 ventures which went to the chopping block last year.
The pace of closures ebbed slightly this September: 260 businesses filed for administration as opposed to 270 in August, but RSM said that this abatement could represent merely a “calm before the storm,” with the impact of the autumn Budget likely to negatively impact pub, bar, and restaurant operators when they go into effect in the spring.
As laid out by the Treasury, new budgetary measures will reduce Covid-era business rates relief from 70 per cent to 40 per cent, as well as increase the national minimum wage and the amount employers are mandated to pay by way of National Insurance Contributions (NICs).
Upon its announcement, UKHospitality chief executive called the Budget “the latest blow for hospitality businesses,” saying it would “raise taxes, increase costs and risk bringing [sector] growth to a grinding halt.”
For his part meanwhile, pub owner Anthony Pender, who heads up London chain Yummy Pubs, labelled the Budget a “crippling blow” to the industry, saying it was “catastrophic for small businesses.”
And now RSM UK director Saxon Mosely has thrown his own hat into the ring of vocal dissent to the Treasury’s approach, pointing to his firm’s latest raft of insolvency data to suggest additional costings will “put further pressure on operators’ already-stretched margins, meaning there’s likely to be more insolvencies to come.”
“The hospitality industry is already in the doldrums, with subdued consumer confidence and people continuing to prioritise saving over spending,” he added. “In the short term, operators will be hoping to make the most of the crucial festive season and build up a war chest of cash reserves, but that’s unlikely to be enough to see them through the raft of additional costs from April next year.”
Way to be a Grinch, Saxon.
