A stark warning that more support is urgently needed to support Staffordshire’s hospitality has been issued.
Staffordshire Chambers of Commerce has seen a ‘dramatic’ rise in concerns raised by members in the sector, with increases to the national living wage and employer national insurance contributions bringing a ‘soaring’ growth in labour costs.
The Chambers has written to Chris Webb MP, Chair of the All Party Parliamentary Group for Hospitality and Tourism, explaining its latest research shows concern about business rates is at its highest for at least eight years, with a third of all firms worried. This rises to 49 per cent in the hospitality sector.
And Craig Wilkinson, whose management company Wilkinson Collective includes businesses such as Barlaston’s Lunar restaurant, has described it as a ‘dire’ situation to be in.
In the letter, Interim Chambers CEO Chris Plant writes: “The hospitality sector is facing an existential threat and requires major government intervention. Without timely intervention, the hospitality sector risks permanent contraction, with lasting consequences for employment, high streets, local supply chains and public finances.”
The Chambers recently brought together some member businesses who operate in the hospitality sector and has plans to launch a dedicated hospitality forum, which will encourage members to work together to help shape and influence its policy and lobbying work.
While the recent announcement of a 15 per cent cut in business rates for pubs and music venues in England has been welcomed, the Chambers would like to see this extended across other hospitality businesses including restaurants, cafes and visitor attractions, which it says ‘remain exposed to a tax which is in need of major reform.’
Direct competition from European counterparts who benefit from significantly reduced VAT rates – such as seven per cent in Germany compared with the UK’s 20 per cent – has also been identified as an immediate threat to business survival.
The letter adds: “This disparity suppresses consumer demand, undermines competitiveness and restricts growth. A reduced VAT rate for hospitality would stimulate demand, protect jobs and stabilise businesses currently at risk of failure, helping to safeguard tax revenues rather than eroding them through closures and insolvencies.
“The hospitality sector is not seeking preferential treatment but a fair, competitive and sustainable operating environment that enables businesses to invest, employ and grow.”
Chris has invited the MP to meet with hospitality businesses from Staffordshire to hear about their challenges.
Recent closures in Staffordshire include Sakana restaurant in Great Wyrley, a relaunch of Warren’s Restaurant & Bar which opened in October but ceased trading earlier this month due to rising operational costs. Slater’s Country Inn in Baldwins Gate shut suddenly in January after 35 years of trading and The Shed in Maybank also closed that month.
Craig, pictured above, told Daily Focus: “I make no light of the dire situation we in hospitality find ourselves, with drastic increases in costs across employment, energy, supplies and increases in business rates in recent years there is an existential crisis happening right now in hospitality that is going to see more and more job losses and closures unless significant government decision making happens soon.
“The Chamber has listened to its members in hospitality, are aware of the situation and have instigated a hospitality forum which is a positive, constructive step to get our voices heard.
“As a result of our first meeting, it was clear this isn’t isolated to a few businesses but every business in the meeting shared the same experience, that this is the worst period any of us can remember, with one operator being active since the 1980’s.
“It is cheaper to buy beef from Brazil than it is our own farms in Staffordshire and the UK which further amplifies the complexity of costs from supply chains to employment to education.”
Is your hospitality business feeling the pressure? Leave us a comment below.
Yes I have Serviced Accommodation in Wellington and business is suffering
Not just because there’s less contractors in the area, the utility bills are very high
Excessive rates charges and overheads are putting all of the hospitality sector under mounting financial pressure. It is stifling business growth and significantly challenges sustainability.