Yahoo Finance Hospitality bosses warn of looming triple whammy of headaches businesses face
The UK’s battered hospitality industry faces another triple-whammy of headaches from April, as it battles to recover from the pandemic, a host of bosses at London-listed firms have warned.
Andy Hornby, the former HBOS boss who leads Wagamama-owner The Restaurant Group, led the chorus of voices pointing to a “fundamental shift” looming.
That will come next year with higher wages ahead, and VAT support and a rent moratorium ending.
Those changes add to current pressures, from staff recruitment challenges to supply chain difficulties.
Hornby said: “I consider myself very lucky that I am running a scale business that has been through a refinancing.”
He told hospitality news site Propel: “I have genuine sympathy for some players who will be looking at Q2/Q3 next year, especially Q2, when three things will happen on one day… That is going to be a pretty fundamental shift for the whole sector, so you have to put your capex where you are most sure it is going to benefit from.”
He also said: “But you do need to spend it, because if we have learnt one thing as we have reopened, consumers want to be in environments where they are having fun socialising again, and that place has been looked after.”
UKHospitality chief executive Kate Nicholls told the Evening Standard: “With soaring inflation on food, drink, utilities and insurance, the cost of doing business is already set to rise exponentially but to make matters worse VAT will rise.”
The City Pub Group’s Clive Watson said: “The hospitality sector is still healing and April next year is too soon to withdraw certain government support.”
Patrick Dardis at Young’s cautioned: “Pretty much everything [overheads] is going up, price increases in drink and food are an inevitable consequence.”
Nightcap in new London deal
Nightcap, the bars business founded by former Dragons’ Den judge Sarah Willingham, has unveiled a £4.9 million deal to buy London firm Barrio Familia.
The purchase will see Nightcap become the operator of an additional five venues, most of which are Latin American-inspired tequila-led cocktail bars. The buyer thinks there is a “significant UK roll out opportunity”.
AIM-listed Nightcap said the purchase will mean results in the year to July 2022 will be significantly ahead of City expectations.
Read More
FTSE 100 Live: KKR’s Telecom Italia move lifts UK stocks, Hochschild Mining dives, oil prices steady
Hochschild shares plunge by half as Peru moves to hasten shutdown of silver mines
Confidence to develop new London offices bounces back
