Customers will need to make “big choices” as nearly half of businesses in the hospitality and food sectors look set to hike prices in July due to higher energy costs and the ongoing cost-of-living crisis.
New figures from the Office for National Statistics (ONS) revealed that a raft of industries have been impacted by factors including rising energy, labour and raw material costs, which are set to affect the price of goods they offer and turnover rates.
Thirty percent of all businesses said they expect to raise prices, with 42% citing energy prices as the main reason.
Hospitality and food businesses look set to face the biggest impact, with nearly half (46%) of companies in these sectors expected to increase prices in July.
The urge to socialise may be strong, but it’s set to get even more expensive in many bars, restaurants and hotels
Susannah Streeter, Hargreaves Lansdown
A quarter of businesses in these sectors also predict that their turnover will decrease in the same month.
The figures also mentioned that in May, 15% of all businesses said domestic demand reduced from the previous month, with 21.8% in the hospitality sector reporting a decrease.
Susannah Streeter, senior investment and markets analyst at asset management company Hargreaves Lansdown, said socialising is going to become more expensive, and consumers will have to make “big choices”.
Ms Streeter said: “It seems the price rises consumers have had to swallow at the tills may only get more painful this summer.
“The urge to socialise may be strong, but it’s set to get even more expensive in many bars, restaurants and hotels.
“Companies are really struggling with higher input prices, and rising gas and electricity bills in particular are becoming so onerous bosses can no longer keep absorbing them.
“Consumers are having to make big choices about budgeting and the hospitality industry is bracing for a decline in spending as the cost-of-living crisis intensifies.”
The hospitality sector has faced problems with staff shortages, with ONS figures earlier in the month revealing that overall job vacancies rose to a new record of 1.3 million.