Bleak vision of future of pubs as landlords reveal drastic measures
EXCLUSIVE: Last orders at 9pm, beer gardens shut and food only served for three hours a day: Bleak vision of future of pubs as landlords reveal drastic measures they are being forced to take to avoid financial ruin this winter
- Energy bills have risen by 400% for some, with pubs needing a constant supply
- Pubs are calling last orders earlier to save on running costs as bills skyrocket
- Landlords have told of having to shut down beer gardens to save electricity
- Many choosing between passing costs onto consumers or closing completely
- Two-thirds are facing closure, risking the loss of hundreds of thousands of jobs
Pubs are already turning out the lights as soaring energy bills hit the ailing hospitality sector – with last orders called hours earlier, food being cut and skeleton teams running venues to avoid financial ruin.
It comes as the chair of the British Chambers of Commerce, Baroness Ruby McGregor-Smith, today warned that two-thirds of pubs could face closure, risking hundreds of thousands of jobs.
Landlords are reporting 400% increases in the price of their bills, costs they are largely unable to cut as they rely on constant gas and electricity supplies to serve customers.
And Michelin-starred celebrity chef and pub owner Tom Kerridge warned the annual energy bill at one of his pubs is set to rise from £60,000 to a ‘ludicrous’ £420,000.
The sharp increase in energy costs mean pubs are facing a tough choice between passing the extra burden onto loyal customers, who are also struggling with the rising cost-of-living, cutting menus and even staff, or shutting shop completely.
The Plough, in Whitstable, Kent, has seen its utilities bills skyrocket from £8,000 to £33,000
The lack of a price cap on energy rates is only the latest crisis facing the ailing hospitality sector, with many landlords and restaurateurs tracing their woes back to the pandemic.
They are also continuing to work through a staffing crisis, with chefs and waiting staff leaving the sector in droves for more stable jobs and restaurateurs saying they have had to raise wages to keep their teams.
Publicans have told MailOnline that they are now only staying in the industry either for the love of it or because they have no choice, as they are no longer turning a profit.
Some, who are just about managing, explain here what they have had to sacrifice to stay afloat…
‘Last orders are at 9pm and my kitchen is only open three hours a day’
Melissa Williams, 47, who has been in the industry for 21 years and a landlady for the last three and a half, said the rise in prices is beyond laughable.
She said her pub, The Plough, in Whitstable, Kent, has seen its utilities bills skyrocket in recent months.
Her original business plan when she took on the pub forecasted bills for electricity and gas at £8,000 per year, which she described as ‘amusing’ in hindsight.
Melissa Williams, 47, who has been in the industry for 21 years, said the rise in prices is beyond laughable
‘I’m now looking at £33,000 just for gas and I now need to work that into my business without affecting my staff and customers,’ she said.
She added that she only managed to secure that deal last week after shopping around and negotiating with suppliers, as most energy companies are not offering fixed deals at the moment,’ she added.
She said the only way they have been able to cope so far is by cutting back wherever they can and running on a skeleton team, and often works for free herself.
‘I’ve had to think differently on how to run the pub,’ Ms Williams said.
‘Weekdays we now close around 9pm, we only really use our restaurant area at weekends to save on staff costs.
‘We are a small team, some weeks we could do with a few more of us, but we’ve all decided so no one loses money we all do a bit longer when needed. I work lots of shifts as obviously I’m ‘free’ labour.’
The landlady said that there will likely be a knock-on effect to the local community, both in terms of jobs and providing a leisure spot for punters.
‘The sad part is I host music all weekend but I will have to cut back now which again will lead to a knock on effect with all the musicians that rely on bookings,’ she said.
‘We now only do food from 12 until three so fryers aren’t on too long.
‘Weekdays we now close around 9, we only really use our restaurant area at weekends to save on staff costs’
‘Weekdays we now close around 9, we only really use our restaurant area at weekends to save on staff costs’, said The Plough’s landlady
‘We had to reduce my menu so we don’t have too much food to go to waste.
‘Quotes for gas were crazy from 27p per unit 64p per day charge to 47p with 80p charges it’s totally frightening.
‘[We] used to hold a big variety of food as we were able to stay open longer but now we cannot afford to run 12 until eight as it would mean having a chef and waiting staff, both quite large wage bills.’
She added that she has now taken on the mantel of chef as they no longer have one, with just eight staff members in total.
Food at The Plough: ‘We had to reduce my menu so we don’t have too much food to go to waste’
Landlady Ms Williams said: ‘I no longer have a chef, I’m now back in the kitchen, so free labour! I now only have 8 staff, which has been hard work’
On top of this, she said: ‘Beer and gas have increased a lot, barrels are now £30-40 more and gas has increased for £15.95 a canister to £29.95.’
Ms Williams said that they are switching off outside lighting and appliances to save energy.
‘The government need to come up with some kind of discount for businesses or we will all struggle to survive.’
She added: ‘You really need to be up for running a pub for the love of it as it’s certainly not to earn a living anymore!’
‘High energy costs mean we have had to get rid of our beer garden and cut our menu’
The Ye Olde Fleece Inn in Kendal, which dates back to 1654, has seen a huge increase of £80,000 to it’s annual electricity bill, which it is already struggling to manage.
The beloved historic pub currently pays £44,000 for its electricity bill, but was last week quoted £124,000 which its owners expect to come in this autumn.
Chris Moss is a director of Westmorland Hospitality, which runs the Fleece.
He worked as an emergency doctor before moving into the industry four years ago, and told the MailOnline that the current crisis facing the sector means ‘it is now easier to run an A&E department than a pub’.
The director of Ye Olde Fleece said: ‘Our biggest costs are staff and fuel… I am not getting any salary’
The director says he has had to roll his sleeves up to keep costs down.
‘There’s two of us directors. I have been cooking, I have been a potwash to keep costs low.
‘Our biggest costs are staff and fuel… I am not getting any salary.’
He said soaring overheads mean he feels unable to help his loyal staff out amid the cost-of-living crisis.
‘The whole thing is tragic. They have massive energy bills themselves and we can’t afford to give them a pay rise.’
He added that the fuel crisis could spell the end for beer gardens across the country.
‘We have literally deconstructed our beer garden today, the whole thing, because we can’t afford to run it. The business has to survive somehow.’
‘We have thirty outdoor bulbs which is a huge energy output, about £50-an-hour in electricity.
He added that the pub will have to strip back its menu as fryers and grills are proving too expensive to run.
‘We are redesigning our menu to reduce what we use in the kitchen.
‘All the stuff that uses high energy, the grill for example. We are going to have to change the way we cook burgers!’
‘We have literally deconstructed our beer garden today, the whole thing, because we can’t afford to run it. The business has to survive somehow’
He said he and his team are ‘going through every single process in the building to see what we can and can’t get away with.’
‘We have got an electrician in to look at it, telling people how much each appliance is going to cost.’
He added that cuts that other industries can make are impossible in the hospitality sector.
‘I have spoken to an estate agent and a solicitor. They are both moving to work from home to save – but we can’t, we are a pub!’
‘We are having to pay our staff more but don’t want to raise prices for struggling customers’
Business partners who founded the popular pizza chain The Stable and now run two restaurants in Lyme Regis, Dorset, say they are ‘terrified’ to get their next utilities bill later this month.
Nikki Raven, who part owns the Swim and Rise restaurants in the town said she and her team are ‘very, very anxious’ about what the future will bring for their businesses.
‘Our electricity bill is already £35,000. We have come off our tariff for the first time this month and haven’t had our bill yet – we are very, very anxious.’
Richard Cooper, who owns the Swim and Rise restaurants in Lyme Regis, Dorset, said: ‘there are a multitude of problems facing the hospitality sector.’
‘We need to have refrigeration, extractors in the kitchens and air con on constantly, or we can’t serve food.’
Ms Raven said they have had to increase labour costs to attract and retain staff amid another ongoing crisis around staffing.
‘Increased labour costs we have just had to absorb,’ she said. ‘It’s still a struggle to recruit, short of paying £25 an hour – which we can’t afford – I don’t know what else we can do!’
But, she added, they are trying to keep food costs low to protect their customers, who are also being affected by the soaring cost of living.
This, she hopes, will keep their footfall strong through the quieter winter months, which will be even tougher for most people this year.
She said that hospitality businesses need to keep lobbying the government for support.
‘We need to have refrigeration, extractors in the kitchens and air con on constantly, or we can’t serve food.’
Her business partner Richard Cooper said: ‘there are a multitude of problems facing the hospitality sector.’
‘We can’t predict what [winter] will bring. The fuel bills are astronomical. But unless we close completely we just have to keep going.’
Mr Cooper also part-owns a bakery, and said the rising cost of flour is also a major concern.
‘With what’s going on in Ukraine and everything else it is a very frightening situation.
‘During Covid we got help from the government, which has all stopped now.
‘The cost of staff is up because you just can’t get staff anymore, so you have to pay them more. Energy bills are up, food costs are up. All in all it’s been very, very tough.’
Richard added that they are waiting for the new Prime Minister to come in to see if there will be any help for the ailing sector.
Community pub set up to keep a local hub is having to increase beer prices and reduce portion sizes
The Stoke Canon Inn is run for free by volunteers in the community, who are largely over 70 and retired, with only one permanent staff member and a self-employed chef.
Maggy Clark, 65, volunteers at the local community pub in Stoke Canon, near Exeter.
The pub, which was bought back by the community a few years ago after a developer put it up for sale, is not-for-profit, but is still struggling to cover its costs as energy prices soar.
‘We were paying a combined energy bill of £8,500 a year. That is going up to £19,500 by October.’
‘When I saw it I thought ‘what the hell do I do to sort this out?’ so I looked into it.’
‘If you do not have a village pub, what do you have?’ she said.
Stoke Canon Inn was bought and is run by the community after a developer put it up for sale a few years ago
She said that on top of rising mortgage payments that the community has to make to keep the pub, they are looking to save wherever they can.
With extractors, ovens, fryers and fridges all needing an almost constant supply of energy, Ms Clark bought an energy monitor to work out if there was anywhere they could save.
She said one ‘vampire fridge’ was draining over £1,000 of their electricity bill a year. ‘It’s on the way out now!’ she laughed.
They are also speaking to a cellar management company to try and keep energy outputs of fridges and fans needed to keep alcohol cool low.
They are hoping to install ‘ambient coolers’ which equalise the temperature to cool outside temperatures in the winter.
The charitable pub, which tries to keep costs low for the local community, is having to raise the price of a pint from £2.60 to £3.90
Meanwhile the pub’s chef, who is self-employed and gets a share of any makings, ‘always keeps an eye on the dining area to see if it’s busy and turns anything off she can if it’s not’.
The charitable pub, which tries to keep costs low for the local community, is having to raise the price of a pint from £2.60 to £3.90.
Ms Clark also said that they were likely going to have to reduce portion sizes to save money.
‘Our chef does huge portions, so I think that is somewhere we can cut costs.’
She also said that more rural pubs should adopt the community model of Stoke Canon, particularly as many across the country are closing down as the rising cost of energy bites.
‘If the costs of staff are going to kill your profits, ask people to volunteer,’ she advised.
She added that pubs are hubs for communities, particularly in the cold winter months and when people are struggling to heat their own homes.
‘We have a woodburner that people can come and use if they’re cold, and can offer a cup of tea and a cake.’
In 2020 the pub was recognised for its work within the community and was awarded The Queen’s Award for Voluntary Service, the highest award given to voluntary groups.
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