Analyst warns £3.4b additional business cost in hospitality sector
Industry leaders have warned of the need for operators to raise prices by 6% to 8%.
Hospitality businesses face an estimated £3.4b of additional costs, not least because of the increase in employers’ National Insurance contributions, according to Buchler Phillips’ Hospitality Index.
Industry leaders have warned of the need for operators to raise prices by 6% to 8%, against a background of already weak consumer spending.
More than three-quarters of a million hospitality employees will have been shunted into employers’ NIC for the first time.
Accommodation and food services insolvencies declined to 175.3 in December from 186.4 in September.
The index reached its highest point in August 2023 at 273.4, reflecting a surge in business closures within the sector.
High-profile operators closing high-street units have included Chipotle and Itsu, Buchler Phillips said.
Tapas chain Iberica was sold out of administration, whilst Simon Rimmer’s vegetarian business Greens collapsed owing more than £500k.
“Hospitality will remain near the top of the insolvency table for the foreseeable future, certainly whilst budget changes continue to kick in and the sector adapts,” said Jo Milner, managing director of Buchler Phillips.
