UK clubs' operating costs have increased by a quarter in the last year
Clubs owners say a “perfect storm” of increased costs put them at significant risk
A new survey by the Night Time Industries Association (NTIA) has revealed that UK clubs have seen a 26% rise in their total operating costs in the last year.
Announced today (8th February) the survey involved 198 NTIA members across England, Scotland and Wales. The 26% rise was comprised by an average increase of 18% in stock such as food and drink costs,18% in workforce costs, as well as 29% in utility costs and 31% in insurance costs.
The survey also revealed that, on average, nightlife businesses such as clubs are operating at 68.9% of their pre-pandemic trading levels.
In addition, it stresses that Night Time Economy (NTE) businesses are set to be threatened by a "perfect storm" of further financial strains including a National Living Wage increase to £9.50 per hour, employers' National Insurance contributions rising by 1.25 percentage points, as well as further reductions in government support (i.e. VAT is due to return to 20% and businesses rates relief will be reduced).
“These statistics show just how bleak things remain for our sector," said Michael Kill, CEO of the NTIA. "I think there is a temptation to think that, because it feels as if the pandemic restrictions are now behind us, that nightlife will just snap back to its pre-pandemic strength and everything will be fine.”
“Sadly, this couldn’t be much further from the truth," he added. "We are still running into severe economic headwinds, and April threatens to be a perfect storm for the sector. I would now even at this late stage urge the Chancellor to postpone all the tax increases – on national insurance, VAT and business rates – to give some perfectly viable night time economy businesses a fighting chance of survival.”
Kill continued: “It is unfortunately the case that when you see enormous cost increases of the kind we have felt in our sector, for the vast majority of businesses there is little else they can do other than pass these on to consumers. Sadly, what this will mean is people’s well-earned nights out being made considerably more expensive, just when they are themselves struggling with their own cost of living and trying to decide which monthly expenses they can do without.”
Revisit our recent long-read in which Sunil Sharpe, Holly Lester and Carly Heath reflect on the fight for nightlife.
Back in December, Will Pritchard explored the mounting challenges faced by UK clubs.
