Half of UK job losses in hospitality, say bosses

Leaders in the hospitality industry have said that more than half of the UK’s job losses since the last budget have come from their sector.

Job losses in restaurants, bars, pubs and hotels total around 89,000 since last October, according to UKHospitality analysis of Office for National Statistics data.

The group said higher taxes announced by Chancellor Rachel Reeves in the Autumn Budget had disproportionately slowed down investment and hiring, adding that “urgent action” was needed to cut business rates and VAT.

The Treasury said it was helping pubs, cafes and restaurants by extending business rates relief and cutting the cost of licensing so more establishments could offer al fresco dining.

UKHospitality, which has around 750 members and represents more than 123,000 venues, said the sector accounted for 53% of all job losses in the UK.

About 4.1% of all jobs in the sector had been lost and the number could reach 100,000 by the time of the next budget, the group added.

Kate Nicholls, chair of UKHospitality, said the numbers were “staggering”.

“What we’re seeing at the moment is a third of businesses cutting their opening hours, one in eight saying that they’re closing sites, and 60% saying they are cutting staff numbers,” Ms Nicholls told BBC Radio 4’s Today programme.

“We could see very significant business closures and failures and accelerated job losses going in to next year, and it could be as high as we saw during the Covid period.

“The sheer scale of costs being placed upon hospitality has forced businesses to take agonisingly tough decisions to cut jobs – with part-time and flexible roles often those most at risk.”

Mark Wrigley, who owns Atlas bar in Manchester, told the BBC he had stopped paying himself in order to save costs.

“We probably generate £300,000 or £400,000 for government, from this one business, and yet I get nothing from it,” Mark Wrigley told BBC’s Breakfast.

An increase to the minimum wage, which came in this April, means that bosses have had to pay workers more in an environment where other costs, such as ingredients and energy bills, are also rising.

Employers are also now paying higher National Insurance contributions, meaning it costs more to employ someone.

These higher business costs coincide with the rising cost of living, which means people are going out to eat less to save on costs, lowering sales and profits for leisure industries.

Prices in the UK rose by 3.8% in the year to July, driven mainly by a jump in the price of air fares and food.

It means inflation is at its highest level since January 2024 and still far above the Bank of England’s target of 2%, according to the ONS.

In its last set of jobs data, looking at the period between May and July, the ONS said job openings had continued to fall, with fewer people on the payroll.

“The number of employees on payroll has now fallen in 10 of the last 12 months, with these falls concentrated in hospitality and retail, said Liz McKeown, director of economic statistics at the ONS.

Job openings fell by 5.8% to 718,000 between May and July across nearly all industries.

The ONS said there was evidence that some firms may not be recruiting new workers or replacing people who have left.

A spokesperson for the Treasury said: “Pubs, cafes and restaurants are vital to local communities, that’s why we’re cutting the cost of licensing, helping more pubs, cafes and restaurants offer pavement drinks and al fresco dining, and extending business rates relief for these businesses – on top of cutting alcohol duty on draught pints and capping corporation tax.”