I believe a sense of optimism is always an asset, no more so than when embarking on a New Year. That is why I am going to start this column by looking at the bright spots in our sector and the reasons why, despite the ongoing challenges, we can still feel positive and proud of our industry.
Restaurant operators in particular can take heart from new data that shows an increase in the number of UK restaurants last year, with CGA by NiQ figures showing a rise from 15,182 sites in September 2023 to 15,229 sites by September 2024. Venues classed as Bar Restaurants fared even better, up 3% to 4,614 outlets – the best performing of all the hospitality sectors.
These increases may not seem huge but, compared to the rest of the market they demonstrate a very positive performance indeed, with the overall number of venues remaining flat – and this too, given the challenges of the last few years, should rightly be seen as a triumph.
So, we can see the potential in the sector. Consumers continue to prioritise gathering with family and friends for a meal in a restaurant, while at the same time restaurateurs continue to show their tenacity and creativity to keep their businesses going and growing. It’s important we celebrate and shout about this, as growth remains central to delivering the Government’s ambitions, and to do this it will need our sector.
It is restaurants, pubs and bars that will drive investment in the local communities they serve, reviving high streets, creating jobs, and transforming lives as they do so. Restaurants exist in every part of the country, touch the lives of many people, and create opportunities for everyone – but the sector can only continue to do this if the circumstances are right.
In April, £3.4 billion of cost are set to hit our industry, thanks to the planned increase in employer National Insurance Contributions (NICs), wage rises and reduced levels of business rates relief. Lobbying for a rethink to the changes to employer NICs, particularly the lowering of the threshold, will therefore be the first, and most urgent job for UKHospitality in 2025. That’s not all on our agenda for change, however.
We will also continue to talk to those right at the top of Government about root and branch reform of business rates. This is one of the biggest barriers to investment in the high street and was a manifesto commitment of the Government’s prior to the election. While we have secured a vital win with a permanent lower multiplier for hospitality this year we will need to continue to work hard to ensure this is delivered in full.
The Apprenticeship Levy reform also remains important. If employers are to be encouraged and rewarded for investing in people, that starts with changes to the levy that give businesses more control and flexibility over how funds are spent. And we need a more sustainable tax burden. The Government needs to be ambitious, cutting pre-profit taxes and regulation that hold us back and we know a lower rate of VAT would boost demand and prevent price rises for consumers.
Last year’s growth in restaurant numbers shows the resilience and importance of our sector to communities up and down the country. We are the beating heart of British high streets and the key to unlocking job creation and economic growth, but we know that the costs coming down the track has really cooled investment and growth potential in our sector. The Government needs to see that increasing our tax burden endlessly will not allow us to continue on the positive track we were on, before the Budget. I hope they rethink these changes and instead harness the ability restaurants have to positively contribute to our economy and communities.
Kate Nicholls is CEO of UKHospitality