31 Jul |
Not Just The Price of Milk |
There used to be a throwaway line when dismissing someone else’s comment as irrelevant of ‘what’s that got to do with the price of milk?’ It was normal for politicians to quote milk’s cost when they needed to prove they were in touch with people’s needs.
Between 2010 and 2016, it was easy, milk was 43-44p per pint. It’s now 68p having risen 42% in 5 years. As a whole, food prices have risen overall by 36% since 2020. And they’re still rising fast 1% higher than the standard rate of inflation at 4.5%. But that is not the biggest problem for today’s catering industry.
Reality is Worse than Expectations
When the rise was announced of the increase in Employer National Insurance contributions, there were some pretty pessimistic predictions. The hit has proved to be bigger than since the first months of the pandemic.
Figures collated by The Times reveal how pubs, bars and hotels have seen their payroll contract as employers struggle to make do and minimise the toll on running costs from higher NIC payments. The measures have led to a shrinkage of numbers on the payroll for pubs, restaurants and hotels of 69,000 since that budget. Some current predictions now believe it may finally cost up to 200,000 jobs.
This represents a really dramatic turn in numbers when we consider for the previous 10 years, the sector would add a net 3,400 jobs in the same nine-month period every year. Given that part-time roles effectively now cost bosses 13% more to take on; it is easy to see why our sector is disproportionately affected.
Bad News Comes in Threes
The recent UK Hospitality sector survey shows:
- 1/3 of businesses are now operating at a loss
- 76% have had to increase prices
- 63% have reduced the hours available to staff
- 1/3 of businesses are restricting opening hours
- 40% have reduced investment
In economic and social terms, the cost will be staggering. UK Hospitality calculates that the sector contributes £140B in economic activity and £54B in tax receipts annually.
Importantly this growth is:
- broad rather than narrow; we are an inclusive employer of 3.5M people, providing jobs for everyone, everywhere from first jobs to routes into leadership and skilled careers;
- national rather than weighted towards London and the South East;
- as an economic and social focal point for growth and regeneration right across the country as hospitality businesses build – and rebuild communities.
We, at AC Services, would urge all our catering colleagues to have a look at their #taxedout campaign and make more people aware of the accelerating crisis our business faces.