Cost of living hitting pubs worse than Covid, North East firms say

Teesside pub-goers have been enjoying parmos - fried chicken with melted cheese

Hospitality bosses in the North East warn the cost-of-living crisis in the run-up to Christmas is making it "harder than Covid" for businesses - leading to fears it could be a far from happy new year.

A Teesside Christmas gathering. It is more parmo and pints than mulled wine and mince pies.

But while there is festive cheer among the guests, there are worries behind the bar.

"Christmas for everyone in hospitality is enormous. It will see you though January and February," says Les Langley, of Greedy Soul, which has pubs in Ormesby, Newton Aycliffe and Durham as well as Longnewton in Stockton.

"But this year we've definitely noticed a downturn over Christmas.

"Yes, we're busier than we have been the rest of the year, but not to the extent you would normally see."

Les Langley, of Greedy Souls, says financial support for the hospitality industry is badly needed this winter

Despite rising costs, Mr Langley has cut his prices rather than increase them in a bid to attract customers.

He is calling for financial support similar to that offered during the pandemic when a £1bn fund announced by the then-Chancellor Rishi Sunak meant hospitality firms could apply for cash grants of up to £6,000 per premises.

"Covid was dreadful for everybody, not just for hospitality," explains Mr Langley.

"But the one thing regarding Covid was there was help at hand for us.

"At the moment, there's no help at all so I would actually say the position we're in at the moment is probably worse than Covid was."

For its part, the Treasury said it recognised the challenges businesses face and was "protecting them from rising inflation through business rates relief".

A spokesperson added its Energy Bill Relief Scheme "will save the typical restaurant 40% on energy bills this winter, and a £2.4bn fuel duty cut".

Ollie Vaulkhard of the Vaulkhard Group, which runs establishments such as The Town Wall, Bridge Tavern and Barluga in Newcastle, says the squeeze is hitting many people hard but some businesses might be better placed than others to weather the storm.

He says while times are tough in the town centre and community pubs, Christmas trade at some high-end venues appears to be holding up.

And it could be an indication of what is happening across the industry.

Bars catering to higher-end clientele might be less effected by the downturn, the Vaulkhard Group says

"This is my fourth recession in business and this one feels very different. There is a camp of people, let's say a third of the population, who genuinely are struggling to heat and eat.

"There's going to be a squeezed middle, say that's a third, and those people will be under pressure.

"Do they go on holiday or out for a meal? Where do they find their savings?

"And there's another third of the population I really believe are untouched by this, so where your customers are drawn from will have a direct impact on how your business reacts."

Places where festive trade does not take off will see serious problems when the quiet months of January and February arrive, according to Kate Nicholls, from the trade group UK Hospitality.

She worries a number of firms will go under without help.

"One-in-three North-East businesses say they have no cash reserves, they've got no fat to be able to withstand an economic shock, and half of them are not breaking even because of energy bills.

"We fear in the new year, if we don't get further government support on energy, we might see a high proportion of those businesses fail."