Price of a pint could rise by 40P in New Year as pubs offset losses

32

View
comments

The cost of a pint of beer could rise by 40p next year to offset lost revenue from Christmas parties as well as higher costs related to inflation, soaring energy bills and increased wages, a pub boss has claimed. 

Clive Watson said the cost was already expected to rise by 25p to 30p due to higher costs linked to the increased cost of living, but and will now rise by a further 10p over the course of 2022 due to weaker festive trading.

The chairman of the City Pub Group, which owns around 50 pubs, said people are cancelling nights out in their droves to avoid catching Covid-19 after Boris Johnson revealed new Plan B measures on Wednesday. 

Mr Watson said December provides many hospitality firms with a third of their annual profits, and they would now be unable to build up the cash to help the balance sheet in the ‘very lean periods in January and February’.

He told BBC Radio 4’s Today programme: ‘From about ten days ago, office parties started to get cancelled, particularly those office parties which were being funded by companies, so typically parties for 40, 50 people.

‘Offices started to sort of either postpone to next year or outright cancel, so there’s definitely been a drop-off in those type of bookings. And going forward after (Wednesday’s) announcement, that is only going to accelerate.’

The average cost of a pint in the UK is £3.86 – with London the most expensive city at £5.33 and Perth in Scotland the cheapest at £3.07, according to a study carried out earlier this year by personal finance experts at Finder. 

Meanwhile it has emerged that new Plan B guidance on working from home will not stop colleagues meeting at a pub to work or holding a Christmas party – leading to some suggesting the acronym WFP or ‘Working From Pub’. 

It comes as economists said UK city centres would lose £3billion next year as Britons continue to work from home – with the average person doing so 20 per cent more than before the pandemic, equating to one extra day a week.

The University of Sheffield’s study examined how previously-bustling cities would be devastated as people spend less time grabbing coffees and lunches during office hours and cut back on after-work trips to shops and pubs.

The shift means 77,000 staff in retail and hospitality could be forced to move somewhere else or change jobs completely amid expectations that the extra day of working from home will become a permanent change.

The ‘doughnut effect’, where city centres empty out as posh suburbs thrive, could make inequalities between rich and poor areas even worse, according to the academics, who said very dense city centres were set to be worst hit.

Spending in the City of London is set to be 32 per cent lower than before the virus struck while spending in central Birmingham is set to be 8 per cent lower – although while some of the cash will be recuperated in suburbs.

Lead study author Dr Jesse Matheson said: ‘We estimate that about £3billion in spending will leave city centres as a result of working from home. Some of this spending will be realised in the residential areas where these workers live, but some may be lost altogether.

‘As suburban neighbourhoods lack the density of city centres, many retail and hospitality businesses will find it is not profitable to relocate.

‘Workers in retail and hospitality may also find that demand has shifted to locations to which commuting is too difficult, which means that supply may not be able to keep up with demand.

‘This money may be recuperated in the higher income suburbs, but in a lot of places working from home means people are more spread out, which isn’t good business for retail business like coffee shops, who require high density areas for business.

‘There is a risk this revenue could be lost from the hospitality and retail sectors forever.’

The figures could even be an underestimate in light of the government triggering ‘Plan B’ restrictions yesterday which include new working from home guidance which is set to come into force next Monday.

The measures, which also include vaccine passports and more mask wearing, are expected to last until at least mid-January but uncertainty over the spread of the Omicron variant means they could drag on for longer. 

The study, which economists from the universities of Birmingham and Nottingham also worked on, said city centres may have to change radically if they are to have a chance of revival. They may end up with fewer shops as they are forced to become more residential.

The study built on previous research by Dr Matheson which found that the speed at which businesses and squeezed personal finances recover from the shock of the pandemic depends on where they live and what they do, with the wealthy set to bounce back more quickly.

Meanwhile the Centre for Economics and Business Research suggested the work from home guidance would cause a £505million reduction in spending in London, Manchester, Newcastle, Nottingham and Leeds. 

It also found the combination of Christmas party cancellations and travel restrictions could cost the economy £1.3billion. 

Shops, pubs and nightclubs have all warned that they face losing millions at the busiest time of year because of the devastating impact of Plan B.

High street retailers said city centres will be hollowed out as workers are ordered to stay at home from next week.

Meanwhile, hospitality has been hit as mounting uncertainty over the mutant Covid strain sparked a wave of Christmas party cancellations, despite the Prime Minister insisting they should go ahead.

Experts put the cost of Plan B, which will also see vaccine passports introduced for large venues, at £4billion per month.

Free market think-tank the Institute for Economic Affairs said the measures could ‘easily’ knock 2 per cent off the size of the economy. The measures could force the taxpayer to stump up billions in the event of job losses and bankruptcies, according to economics fellow Julian Jessop.

UKHospitality, which represents more than 730 businesses, said Plan B would mean trade over Christmas would fall by 30 per cent, which will see pubs and restaurants closed and jobs lost.

Chief executive Kate Nicholls said the measures were presented as ‘light touch’ but will actually have a ‘significant’ impact on businesses.

She said: ‘She said: ‘It’s helpful that businesses are being kept open and allowed to trade and that the Prime Minister is still allowing socialising, but there will still be a significant hit.

‘There will be an impact on trade, footfall and people’s willingness to go out.

‘And we are already seeing a downturn in trade as a result of concerns about the variant. We expect that to escalate particularly in city centers with the work from home guidance.’

It comes as a study revealed the devastating economic impact of the shift toward working from home that has already happened.

The average worker will stay at home for one day a week more in 2022 than before the pandemic, according to University of Sheffield researchers.

This will cost city centres £3billion in lost revenue next year alone and will have ‘huge consequences’ for retail and hospitality businesses, the study found.

British Beer and Pub Association chief executive Emma McClarkin said the rules are a ‘huge blow’ for the sector.

She said: ‘It further undermines consumer confidence and is devastating for pubs based near offices and in town centers.

‘The festive period is crucial to the recovery of our sector, so these restrictions could not have come at a more important trading time.’

And the boss of Britain’s oldest brewer Shepherd Neame said the measures would ‘destroy consumer confidence’ and undermine the sector’s recovery from Covid.

There does not appear to be evidence supporting the move to Plan B, he said, and working from home and vaccine passports will be ‘disastrous’ for the chain’s 320 pubs.

The director of business and regulations at the British Retail Consortium, which represents 170 retailers in the UK, said the sector is a ‘safe space’.

Tom Ironside said: ‘It is inevitable that any move to reintroduce advice to work from home would have significant impacts on footfall for some retailers who have only just begun to find their feet after the pandemic.’

High street staple shoe repair chain Timpsons saw an ‘immediate’ drop in footfall when Omicron emerged.

Sir John Timpson said working from home had a ‘big impact’ on high streets through the pandemic and suggested the Government was ‘lurching’ from one approach to another.

He said just as city centres are starting to recover, the Government’s Plan B measures are ‘sending it backwards’. Sir John said we need to take steps to ‘learn to live with the virus’.

He told Today: ‘We have got to get used to life like this and come up with a more permanent situation, not lurching from one situation to another.’