Following announcements that the pound has reached new lows since the introduction of tax cuts in the UK’s budget;

Ramsey Baghdadi, Foodservice Analyst at GlobalData, a leading data and analytics company, offers his view:

“The UK foodservice industry has been experiencing healthy growth, especially since social distancing rules ended and more people are dining out. However, inflation could change the tides. Soaring prices and a weaker pound could take its toll on smaller foodservice businesses such as bars and pubs.

“Footfall for bars and pubs is already low, so increasing menu prices would be the last straw for many operators. According to a survey by GlobalData, almost half (48%*) of UK consumers have not been to a pub, club or bar in the last year, or have been only once a month.

“The future of smaller foodservice businesses such as pubs is in jeopardy if the UK government does not provide financial support. Margins are tight for local and independent pubs; if energy bills go up even more, they won’t be able to sustain business. Further, if the price of hops go up, so will beer—pubs’ best-selling item—and consumers may decide to just head to their local supermarket instead.

“The survival of pubs will rely on the sourcing of local, affordable ingredients, while the pound continues to fall. It is only a matter of time until we see which pubs can master adapting to a tough economic environment and which can’t.”

*GlobalData’s 2022 Q3 UK Consumer Survey, August 2022, Sample Size 553 Respondents