Nearly three-quarters of pubs trading at a loss or breaking even at best

08 June 2021 by
Nearly three-quarters of pubs trading at a loss or breaking even at best

Around 74% of pubs are trading at less than 75% when compared to 2019 figures, meaning they are loss-making or breaking even at best despite reopening.

Staffing continues to be one of the main challenges, with 53% of respondents to the British Institute of Innkeeping's (BII) most recent member survey saying they cannot recruit enough staff to cope with the additional workload created by Covid restrictions, and 35% saying they have lost staff as soon as they have returned from furlough.

To enable their survival over the course of the pandemic, nearly 60% have had to take a Bounce Back loan to survive, and 24% still have unpaid rent debt that they are now also facing, with the rent moratorium due to end this month.

Almost 50% have pandemic-specific debts of over £20,000 per pub and, despite using their reserves, in many cases using their savings and borrowing from their own pensions, half of these have debts of between £40,000 and £80,000 per pub.

And 56% have said that they will need more than two years to repay the debts accumulated in the pandemic, with half of those still be paying off those debts over a minimum of five to 10 years.

Without restrictions fully lifted, enabling them to trade freely and fully from 21 June, 11% of businesses will fail, 43% will be loss-making and will continue to take further debt, while 34% will only manage to break even with current regulations in place.

In terms of support, 82% said an extension of a full business rate reduction until April 2022 for England, in line with the other devolved nations, is necessary or business-critical, while 89% said a full and fundamental reform of the rates system for pubs was needed.

To support trading, 89% said the current VAT reduction to 5% needed to be extended until April 2022, with the same number calling for a specific cut in duty for draught products in pubs.

A further 60% said they needed government help towards rent debt, with 66% calling for further support from their landlords, and 70% said there was a need for further grant support to help them rebuild their businesses.

Steven Alton, chief executive of the BII, said: "While it has been fantastic to see many of our nations' pubs reopening after months of closures, our members and their teams are exhausted as they try to rebuild their businesses, keep staff and customers safe, and adhere to all of the extensive restrictions, specifically placed on their venues.

"Without the full lifting of restrictions on 21 June, especially table service and social distancing, which render the majority of our members unprofitable, these viable businesses face at the very least an uncertain future, filled with years of debt repayments, and at worst, immediate business failure.

"We have taken our members' voices to the heart of government throughout the course of the pandemic, specifically highlighting the significant role they play in the economy, through employment and support of their local communities across the UK.

"Without real certainty of trading once again, free of restrictions, the vital role they are able to play at the heart of our nations' recovery is in jeopardy. We are calling on government to now deliver against its roadmap, allowing our pubs to begin their long road to recovery, before it's too late."

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