A business chief has warned that venues will have no option but to increase prices of every single one of their products and cut back hours in order to survive a £1.7million bill thanks to Rachel Reeves’ Budget.
One of the most criticised policies is an increase in employers’ National Insurance contributions, which will be activated in the spring. Business bosses say it will cost them dearly.
Louise Maclean, director of sales and marketing at the Signature Group – a hospitality firm with 700 staff across 24 venues in Scotland – and director of the Scottish Hospitality Group, told BBC Radio 4’s Today programme this morning: “We are looking at a price increase on April 1 to reflect the cost pressures that are coming into the business, both from the Budget announcements earlier in 2024, but also from price rises that out suppliers are passing onto us.
“We have no choice but to pass onto the customer, which is what none of us want to do. We don’t want to see increased prices at the till. But there is no choice, because, if we don’t, we’re going to be a loss making business in 2025.”
She added that the firm’s suppliers’ costs – such as production of food, productioin in factories and production in butchery – have increased because of the Budget, which are passed onto venues.
“We have our own cost pressures,” Ms Maclean said, “which is £1.7million, is what the Budget cost us. So, from the 31st of March into the first of April, we will see a £1.7million into our costs.
“We cannot survive as a business unless we pass them onto the customer.”
The price of every single product will have to go up by around 10% if her company wants to keep going, the businesswoman added, highlighting that the hospitality sector is seeing a “raft” of closures, and people are “pulling back hours”.
In George Street in Edinburgh, for example, 50% of the venues are shut on Mondays and Tuesdays, as bosses “reign in back in” after a “bouyant” Christmas.
“The trade was alive,” Ms Maclaen said, “but we are so worried about what’s happening on April 1, that we have no choice but to contract [opening hours] just now. Nobody wants to see a contracting hopitality sector. We’re the lifeblood of the high street.”
She added: “For us to maintain profitability from 2024, we have to pass on the price rise to the consumer and ensure sales don’t drop.
“So it’s a big, big gamble. I don’t want to see £20 fish and chips in Edinburgh’s Grassmarket, but that’s what we are looking at. These are the battles we’re facing.”
The business chief then expressed a worry that footfall will drop and hospitaolity may seem to be “even more of a luxury item” as people are not able to afford to splash more cash.
Ms Maclean concluded: “The phrase we are using is ‘Survive 25′”
