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Hospitality Sector Under Pressure: Tax Increases and Job Cuts Highlight Industry Woes

Strategic Insights

— 1 min read

The UK hospitality sector is facing an unprecedented crisis, with nearly 90% of pubs, restaurants, and other businesses raising prices and over 50% cutting staff numbers since the government's introduction of higher employers' national insurance and minimum wage. According to industry chiefs, the tax increases have added £3.4 billion to costs, resulting in 84,000 job losses since last year's autumn Budget.

Key Takeaways:

  • 87% of hospitality businesses have increased prices as a direct result of government-triggered cost increases (Source: Industry chiefs).
  • 53% of hospitality firms have cut staff numbers since April's increase in employers' national insurance and the minimum wage (Source: Industry chiefs).
  • £3.4 billion has been added to hospitality costs since the April tax increases (Source: Industry chiefs).
  • 84,000 jobs have been lost in the hospitality sector since last year's autumn Budget (Source: Industry chiefs).
  • The number of pubs that have closed since 2016 is now nearly 5,000, with nearly five pubs closing every week in the first half of this year (Source: Campaign for Real Ale Camra).
  • The number of high street retailers going bust is on track to surge by 25% this year, according to experts (Source: Kroll).
  • Over 2,000 job losses are threatened at Claire's Accessories, which has gone into administration (Source: Industry experts).
  • Poundland has announced a number of store closures (Source: Industry experts).

Statistics:

  • 87% of hospitality businesses have increased prices (Source: Industry chiefs).
  • 53% of hospitality firms have cut staff numbers (Source: Industry chiefs).
  • £3.4 billion added to hospitality costs since April (Source: Industry chiefs).
  • 84,000 jobs lost in the hospitality sector (Source: Industry chiefs).
  • 5,000 pubs closed since 2016 (Source: Campaign for Real Ale Camra).
  • 25% increase in retail failures predicted this year (Source: Kroll).
  • 2,081 company insolvencies in England and Wales in July, a 1% increase from June (Source: Insolvency Service).

Sources:

  • Industry chiefs
  • Campaign for Real Ale Camra
  • Kroll
  • Insolvency Service
  • EY-Parthenon
  • Government spokesperson

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