The UK hospitality industry has been hit with several major cost increases in recent years, making it challenging for businesses to stay profitable. Key cost pressures include:

🔥 Energy Costs

• Skyrocketing gas and electricity prices have significantly impacted hospitality businesses, especially those with high energy usage like bars, restaurants, and hotels.
• Although wholesale prices have fallen slightly, many businesses are still locked into expensive contracts from peak periods.

💷 Staffing & Wages

• The National Minimum Wage/National Living Wage is increasing in April 2024, pushing up payroll costs.
• Staff shortages mean businesses must offer higher wages to attract and retain employees.
• Increased pension contributions and employer National Insurance costs also add to the burden.

🍽️ Food & Drink Prices

• Inflation has driven up ingredient and wholesale food prices.
• Supply chain disruptions, Brexit-related import costs, and extreme weather affecting crop yields have all contributed.
• Alcohol duty reforms in 2023 increased costs for certain drinks.

🏛️ Business Rates & Rent

• Many venues face higher business rates after the 2023 revaluation.
• Commercial rents have risen due to inflation and high demand for prime locations.
• Landlords are passing on increased mortgage costs to tenants.

📉 Financing & Card Processing Fees

• Rising interest rates have made business loans and overdrafts more expensive.
• Card transaction fees from providers like Visa and Mastercard have increased, cutting into profit margins.

📢 Marketing & Compliance

• Increased costs for digital advertising (Google, Meta, etc.).
• New compliance requirements, such as allergen labeling and sustainability regulations, require investment in training and systems.

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💰 The Lifeline of Hospitality: Cashflow Management 💰

In hospitality, cashflow is king. A profitable business can still struggle—or even fail—if cash isn’t managed properly. With rising costs and unpredictable trade, ensuring a steady flow of funds is more important than ever.

Why Cashflow Matters:
✅ Covers essential expenses like wages, stock, and rent.
✅ Helps manage seasonal dips in revenue.
✅ Allows for reinvestment in growth and marketing.

How to Keep Cashflow Healthy:
🔹 Monitor Finances Regularly – Track income & expenses to spot issues early.
🔹 Negotiate Supplier Terms – Flexible payment options ease pressure.
🔹 Streamline Card Processing Fees – Lower rates can save thousands.
🔹 Maximise Revenue Streams – Promotions, events & upselling boost income.
🔹 Control Stock & Waste – Efficient ordering prevents unnecessary spending.

At UMS Consultancy, we help hospitality businesses improve cashflow, reduce costs, and increase profits. If your bar, restaurant, or venue needs support, let’s chat!

📩 Get in touch today!