Easter weekend bookings in pubs were up 40%, according to hospitality technology provider Zonal, while the British Beer and Pub Association (BBPA) estimates pubs served an extra 11m pints between Thursday and Monday.
This Easter success may prove vital for pubs and breweries up and down the country. They will now, of course, feel the pinch of April’s hiked business rates and above-inflation uptick in the National Living Wage.
Those increases will cost pubs and brewers roughly £450 million, at a time when, despite some nascent first quarter growth in the beer and pub sector, the cost of doing business remains high.
The BBPA is urging the government to evaluate the compounding effect that these increases have on the cost of doing business and how these can be alleviated. This includes ways to reduce the overall tax burden faced by the beer and pub sector to turbo-charge the burgeoning growth the beer and pub sector is starting to move towards after four years of incredibly tough trading. This level of growth would then more than pay off any initial cost for the Treasury, says the BBPA.
Ahead of these cost hikes, a poll of BBPA members found 89% of hospitality businesses are concerned about these minimum wage increases, which will cost the sector an additional £425m. Sixty per cent are very concerned. The business rates multiplier increasing by 6.7% this month is set to cost pubs an additional £25m, tightening already thin margins further.
Pubs pay up to five times more business rates relative to their turnover compared to other equivalent businesses, an over-payment of some £400m. The BBPA is calling for long-term reform to business rates to ensure all businesses pay their fair share, along with fairer energy deals and a reduction in the vast gap between the VAT charged on food in pubs compared to supermarkets.
“The Easter trading figures are even better than expected and provide a great springboard into the spring and summer months ahead,” said BBPA chief executive Emma McClarkin.
“These come at a time when the beer and pub sector are having to absorb a raft of new cost increases and while every single pub and brewer across the country is undoubtedly committed to paying their staff a fair wage, the almost half a billion-pound combined cost increases to the National Living Wage bill and business rates risks stunting the green shoots of growth emerging.
“There is, however, a clear solution in this situation. The government must step up and invest in a sector that adds £26bn to the economy, provides almost 1 million vital jobs, and generates £15bn for the Treasury, so pubs and brewers can also invest in themselves, and the resulting prosperity will more than pay the government back on its investment.
“Unlocking the economic and societal value pubs and brewers bring will provide massive benefits to every local community where they operate, while also combining to create an engine [for] much-needed economic growth that the government is so keen to nurture.”
