‘My pub is busier than ever, but we can’t make ends meet’

Busy pubs are still “struggling” to stay open because running costs have risen so much, their owners have said.

More than 450 pubs, restaurants and cafes closed in Yorkshire between 2022 and 2024, according to figures from the trade body UK Hospitality.

Allen Simpson, the organisation’s deputy chief executive, said he expected the next financial year to be even “tougher” due to increases to the minimum wage and employer National Insurance contributions.

Janine Lawson, landlady of the Hillsborough Tap in Sheffield, said she had been forced to reduce the pub’s opening hours despite the number of customers remaining stable.

Mr Simpson said: “The budget has brought £3.9bn of extra costs to the sector across the country, which is why when we talk to the government we’re asking for things like making life easier on VAT and employer National Insurance contributions so the cost of opening a restaurant and employing people goes down.”

In Sheffield, Ms Lawson said she now closed the Hillsborough Tap on Mondays and Tuesdays.

“Year on year, we are 56 barrels up. To increase in 12 months by 56 barrels is amazing, it’s something we’ve not achieved in the past.

“Sales are going up, but the bottom line is ever decreasing, so how busy do you need to be to actually turn a profit?”

Ms Lawson said customer spending was being swallowed up by increased costs at the pub, which first opened 22 years ago.

She said: “Energy is a big part of it, minimum wage, supplier increases.

“Only this week, we’ve had a letter from Sky with a 20% increase. I can’t possibly pass that increase over to the consumer.”

Meanwhile, Simon Midgley, who opened Starling, a bar and cafe in Harrogate, in 2017, said his business’s energy bills had also risen.

He explained he was currently paying £2,260 per month for utilities, up from £1,261 per month two years ago.

He said: “It is increasingly getting harder to transfer your turnover down to the bottom line.

“Over the last three years, we’ve seen a 10% increase in staff costs and 40% of our net turnover is staff costs.”

One way for pubs and restaurants to stave off closures and increase profits is to pass costs on to customers, but Mr Simpson warned against that.

“My sense is that most of us have reached the edge of our ability to absorb more price rises. I don’t think any of us feel we can pay more for a burger or a roast dinner,” he said.

“I don’t think we are going to see significant price increases. It’s much more likely to be further pressure on restaurants as they battle to stay open and create jobs – and that’s going to be the battle we see over the course of 2025.”

Naeem Aslam, director of the Aagrah in Leeds, one of a chain of restaurants in West and North Yorkshire, said the last 18 months had certainly been a challenging time, especially as interest rates increased.

“People have a much lower disposable income – I know, I pay a mortgage and I know how much extra I am paying,” he said.

“I understand why we are not seeing as many people as we normally used to see.”

Mr Aslam said he had noticed many of the restaurant’s regulars had been visiting much less frequently.

“Where we used to see them once or twice a week, we now see them every two weeks or [once] a month or on special occasions.”

The business was now looking at how to address upcoming changes, such as the minimum wage increase, without raising prices for customers, he said.

He warned that could include streamlining its “labour-intensive” menus and making operations more efficient.

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