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Nearly a fifth of pubs and bars fear they won’t survive the next three months, official figures show, despite an upturn in optimism since restrictions on hospitality were eased.
According to data gathered by the Office for National Statistics, pub and bar owners are 20 times more confident now than they were in February, when hospitality venues across the country were shut with no end in sight.
But while the number of business owners reporting a high degree of confidence about their prospects moved above 20% for the first time since November 2020, the sector remains burdened with unsustainable levels of debt.
Almost a fifth said they have a low degree of confidence that they can make it through to early August.
The proportion fearing collapse inside three months had fallen as low as 3% in April 2021, when beer gardens opened, but has since crept up to 19%.
Susannah Streeter, senior investment and markets analyst with Hargreaves Lansdown, said: “The doors may be open, pints are being pulled but there is still a long way to go before the pub and bar sector can celebrate with a cheers to good health.’’
Earlier this week, the chief executive of UK Hospitality, Kate Nicholls, urged the government to broker a deal to prevent landlords demanding arrears in full when a temporary moratorium on commercial rent demands ends on 1 July.
The sector is struggling under about £6bn of debt, about £2.5bn of which relates to rent payments that landlords can demand in full from that date unless the government intervenes.
Businesses have also reported problems extending the term of bounceback loans that banks are supposed to make available for up to 10-year terms.
The shadow minister for business and commerce, Seema Malhotra, said the government “must urgently address the £6bn debt burden facing the hospitality industry by introducing a flexible repayment scheme.
“Forcing businesses to pay back debt taken on during the crisis while still struggling to turn a profit is unfair and will harm the recovery.”
The Guardian has approached the Ministry of Housing, Communities and Local Government for comment.
Source: The Guardian
Keyword: Nearly one in five pubs fear they will fold in next three months | Hospitality industry