Pubs are already shutting down the lights as rising energy costs hammer the struggling hospitality industry. Last orders are being placed hours earlier, food is being reduced, and venues are being managed by skeleton crews in an effort to stay afloat.
Two-thirds of pubs face closure, endangering hundreds of thousands of jobs, the leader of the British Chambers of Commerce said today.
Due to their reliance on regular supplies of gas and electricity to supply their tenants, landlords are claiming 400% rises in their monthly expenses.
Tom Kerridge, a prominent chef with a Michelin star and a pub owner, stated: “Energy prices at one of my pubs have increased from £60,000 to £420,000 a year. It is simply really absurd. To survive, I need an additional £360,000 in profit from that bar per year, or an additional $3 million in sales.
Due to the increases, pubs must make a difficult decision between closing their doors permanently or passing the additional costs onto devoted customers who are already trying to keep up with the growing cost of life.
The absence of an energy price ceiling is only the most recent issue the struggling hotel industry is dealing with; many landlords and restaurateurs can directly attribute their problems to the epidemic.
Additionally, they are still dealing with a personnel issue, as cooks and waiters continue to flee the industry in search of more secure employment, forcing restaurateurs to hike pay in order to retain their teams.
According to pub owners who spoke to MailOnline, they are no longer making a profit and are only continuing in the business out of love or because they have no other option.
The increase in pricing, according to landlady Melissa Williams, 47, who has been in the profession for 21 years and for the last three and a half years, is beyond absurd.
She said that the costs for her bar, The Plough, in Whitstable, Kent, had skyrocketed recently.
Her first business plan, which she later referred to as “amusing,” projected power and gas costs for the pub to reach £8,000 annually.
I’m looking at $33,000 just for petrol, and I now need to include it into my company without harming my employees and clients, she added.
She said, “Most energy providers are not now giving fixed offers, so I had to shop around and negotiate with suppliers in order to acquire that deal last week.
She said that the only way they have been able to make ends meet so far is by making cuts everywhere they can, working with a smaller crew, and often working for nothing herself.
I’ve got to reassess how to manage the pub, Ms. Williams said.
In order to save employee expenses, we now shut at 9 p.m. on weekdays and only actually utilise our restaurant space on the weekends.
We have a small staff and could use a few more people certain weeks, but we’ve all agreed to work a little bit longer when necessary so nobody loses money. I put in a lot of shifts since I’m clearly “free” labour.
According to the landlady, there will probably be a ripple effect on the neighbourhood in terms of employment and offering a destination for tourists.
The terrible aspect is that I usually host music throughout the weekend, but I will have to scale down, which will again have an impact on all the artists who depend on bookings, she added.
To prevent fryers from running too long, we only serve meals from noon to three.
“To save labour expenses, we now shut at 9, and we only really utilise our restaurant section on weekends.”
To avoid having too much food go to waste, we had to cut down on my menu.
“Gas prices were insane, ranging from 27p a unit to 64p per day to 47p with 80p charges. It’s just terrifying.”
“[We] used to hold a huge variety of food since we could remain open later, but now we cannot afford to operate from 12 until 8 because it would need a chef and waiting staff, both of whom have significant pay costs.”
She continued by saying that because they were down to only eight employees, she had to assume the role of chef.
Food at The Plough: “We had to cut my menu to make sure there wasn’t too much food left behind.”
She said, “Beer and gas have risen a lot; barrels are now £30 to £40 more, and gas has gone from £15.95 to £29.95 a canister.”
According to Ms. Williams, they are turning off outdoor lighting and appliances to conserve energy.
We will all struggle to survive if the government doesn’t come up with some sort of discount for businesses.
You really need to be willing to run a pub for the love of it because it’s no longer a way to make a living, she continued.
“Due to high electricity expenses, we had to eliminate our beer garden and reduce our menu.”
The Ye Olde Fleece Inn in Kendal, which dates back to 1654, is already having trouble paying its enormous yearly power cost of £80,000.
The cherished old bar presently pays £44,000 for power, but just week it received a quotation for £124,000, which its owners anticipate would arrive this fall.
The Fleece is managed by Westmorland Hospitality, whose director is Chris Moss.
Prior to entering the field four years ago, he practised emergency medicine. He recently told the MailOnline that due to the industry’s present problems, “it is now simpler to operate an A&E department than a bar.”
Ye Olde Fleece’s director stated: “Our major expenditures are employees and petrol. I do not get a compensation.”
The filmmaker claims that in order to keep expenses low, he had to roll up his sleeves.
“There are two directors of us.” To keep expenses down, I have been washing dishes and cooking.
“Our largest expenses are personnel and gasoline… I do not get any pay.
He said that despite the cost-of-living problem, his high overhead costs prevent him from being able to support his devoted workforce.
“The entire situation is tragic.
They themselves have enormous energy expenses, thus we are unable to afford to increase their wages.
The gasoline issue, he said, may mean the end of beer gardens nationwide.
We practically demolished our whole beer garden today since we cannot afford to maintain it. The company must find a way to survive.
We use roughly £50 of electricity every hour to power our thirty outside lighting, which has a significant energy output.
He continued by saying that the pub would have to reduce its menu due to the cost of operating the fryers and grills.
To use less in the kitchen, we are redesigning our menu.
“Everything that consumes a lot of energy, like the grill.” We’ll need to alter the way we prepare hamburgers!
We practically demolished our whole beer garden today since we cannot afford to maintain it. The company must find a way to survive.
In order to determine what they can and cannot get away with, he claimed that he and his team are “going through every single process in the building.”
“We’ve sent in an electrician to have a look at everything, and he’s going to inform everyone how much each item will cost.”
He continued by saying that the hotel industry cannot make the cutbacks that other businesses can.
I’ve spoken to a solicitor and an estate agent. They are both relocating to work from home, but we are a pub, so we can’t do that!
Business partners who started the well-known pizza brand The Stable and now own two eateries in Lyme Regis, Dorset, claim they are “terrified” to receive their next utility bill.
Nikki Raven, a co-owner of the town’s Swim and Rise restaurants, expressed her team’s’very, very anxiety’ about what the future holds for their companies.
Our current power bill is £35,000. We haven’t received our bill yet after leaving our tariff for the first time this month, and we are really worried.
Owner of the Swim and Rise eateries in Lyme Regis, Dorset, Richard Cooper stated: “There are a number of difficulties impacting the hospitality business.”
We can’t serve food unless there is refrigeration, air conditioning, and extractors in the kitchen.
In light of yet another continuous staffing dilemma, Ms. Raven said that they had had to raise labour expenses in order to recruit and keep employees.
We have just had to accept higher labour expenditures, she remarked. “I don’t know what more we can do, it’s still hard to recruit, short of paying £25 an hour – which we can’t afford!”
However, she said, they work to keep food prices low to safeguard their clients, who are also feeling the effects of the rising cost of living.
She thinks that by doing this, their foot traffic would remain steady during the slower winter season, which will be more difficult for most people this year.
She advised hotel companies to continue pleading with the government for assistance.
We can’t serve food unless there is refrigeration, air conditioning, and extractors in the kitchen.
According to her business partner Richard Cooper, the hotel industry is dealing with a wide range of issues.
We are unable to foresee what the winter may hold. The cost of petrol is exorbitant. However, as long as we don’t entirely shut down, we must continue.
Mr. Cooper, who co-owns a bakery, also expressed worry about the growing price of flour.
“With what’s happening in Ukraine and everything else, the situation is pretty ominous.”
We had assistance from the government during Covid, but that has all gone now.
Because it’s so difficult to find employees, wages have to go up as a result. Both energy and food expenditures have increased. Overall, it has been quite difficult.
Richard continued by saying that they are anticipating the arrival of the new Prime Minister to see whether the struggling industry will get any assistance.
Maggy Clark, 65, works as a volunteer at the neighbourhood bar in Stoke Canon, close to Exeter.
The Stoke Canon Inn has just one regular employee and a self-employed chef, and it is managed entirely by community volunteers, the most of whom are retired and over 70.
Although the bar is not for profit and was repurchased by the neighbourhood a few years ago when a developer put it up for sale, rising energy bills are making it difficult for it to break even.
We were spending £8,500 annually on our total energy bills. By October, that is going increased to £19,500.
“When I saw that, I wondered, “What the heck can I do to fix this?,” so I started researching it.”
What do you have if there isn’t a village pub, she questioned.
She claimed that in addition to the rising mortgage payments the neighbourhood must make to maintain the pub, they are looking for savings in any area they can.
Since fridges, ovens, fryers, extractors, and other appliances require an almost constant supply of energy, Ms. Clark purchased an energy monitor to determine where they could make savings.
She claimed that just one “vampire fridge” was costing them more than £1,000 a year in electricity. She exclaimed, “It’s leaving now!” she laughed.
To try and reduce the energy outputs of fridges and fans needed to keep alcohol cool, they are also in contact with a cellar management company.
In order to lower outside temperatures in the winter, they intend to install “ambient coolers,” which equalise the temperature.
The self-employed chef of the pub, who receives a portion of any proceeds, is said to “always keep an eye on the dining area to see if it’s busy and turns anything off she can if it’s not.”
The charitable pub has to increase the cost of a pint from £2.60 to £3.90 in order to maintain low prices for the neighbourhood.
Ms. Clark said that in order to save money, portion sizes would probably need to be decreased.
“Our chef makes enormous servings, so I believe that’s where we can save money,” said the speaker.
Additionally, she suggested that other rural pubs emulate Stoke Canon’s community model given the widespread closures caused by the nation’s growing energy prices.
“Ask individuals to volunteer if the expenses of employees are going to destroy your earnings,” she said.
She continued by saying that pubs serve as community centres, especially during the chilly winter months when people struggle to heat their houses.
We provide a cup of tea and cake, as well as a woodburner that folks may use if they’re chilly.
The pub was honoured for its community service in 2020 with The Queen’s Award for Voluntary Service, the highest honour granted to nonprofit organisations.