The latest Market Insight Report from the Scottish Licensed Trade Association (SLTA) has found that 6% of Scottish licensed hospitality venues are considering closure, and that 80% of survey respondents expect the Scottish economy to decline.
The survey, which represent over 400 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses throughout the country, reveals that the Scottish licensed hospitality industry enters 2025 with concerns over continued pressure from rising costs, staff availability, and changes to employers’ national insurance contributions, with 63% of outlets reporting cost increases of over 10% and that these rising rates continue to be a challenge across the sector – with 33% of outlets also seeing an increase of 10% or more.
It also found that 80% of outlets expect the Scottish economy to decline, and that although visitors were spending less time and less money in venues, there was an increase in low-alcohol products with outlets expecting to see a continuing shift towards lower-strength products. Despite the challenging environment, 58% of outlets expect to be profitable or break even in 2025.
Colin Wilkinson, SLTA managing director, said, “Christmas and New Year was a difficult period for our industry with a universal theme of visitors spending less time in outlets and spending less on food and drink. We did see an upturn in lower-strength products, but this was offset by customers having ‘one course instead of two’.
“Over the course of the calendar year, 49% of outlets were down year on year, but over the festive period this increased to a worrying 59% of outlets reporting a decline.’’
Mr Wilkinson added, ‘‘We also continue to face rising costs and staff shortages – 38% of outlets told us that staff availability is impacting upon opening hours, up from 23% in the summer. We are also seeing increased costs from suppliers and government increases in taxes.
“Regarding the pending changes to NI contributions, 75% of outlets expect new employers’ NI costs to impact on their staffing levels. This will make it even more difficult for businesses to open their full operating hours, remain competitive and get more people into our venues.
“We are also facing the harsh reality that 6% of respondents are seriously considering closure.”
Commenting on staff availability and how the government can support the sector, Mr. Wilkinson added, “One proposal that the SLTA supports is the introduction of a Scottish hospitality workers’ visa, which could help to alleviate staff shortages.
“The hospitality industry fulfils a critical role in Scotland’s food, drink and tourism industry, and we are keen to work with government to explore opportunities to protect jobs in this vital sector and help businesses to work to their full potential.”