Liverpool restaurants and bars braced for big changes

Restaurants and bars in Liverpool are preparing for big changes next month as a raft of measures announced in last year’s budget finally come into force.

It could mean price rises for many – and possible closure for some restaurants and bars in Liverpool.

The Autumn Budget in 2024 introduced a number of new financial adjustments including higher employer National Insurance contributions and an increase in the National Living Wage.

It also reduced – possibly the most surprising move – the reduction in Business Rates Relief which has gone from 75% to 40% piling huge pressure on the hospitality industry.

Fiona Hornsby, who owns city centre Bridewell and Denbigh Castle pubs and who took over the popular Pen Factory in Hope Street six months ago, says: “We will be absorbing some of the costs but ultimately we have no option but to increase pricing, which we do with a heavy heart as we know people are getting squeezed every which way.”

She adds: “It’s going to add a huge cost to the business.

“We have been meeting suppliers to see if we can buy better and seeking any deals we can take advantage of to keep pricing down because, coupled with the above increases, we have the increase in duty on wines and spirits and approximately a 3-5% increase in the cost prices of our products.

“Sky and TNT are increasing, along with phone costs, the internet … and the list goes on.

“We are very disappointed that the Government has not listened to businesses with regard to the increase in NI for employees and the change in business rates.

“While they are professing to be a government of growth these policies will ultimately stifle growth and, I would suggest, increase inflation further.”

Iain Hoskins, owner of Ma Boyles, Tempest on Tithebarn, Nova Scotia on Mann Island and, more recently Newington Temple bar, agrees with Fiona.

“You have what’s set by the Government and the impact of that is not only the costs that you shoulder by employing people, but all the other stuff – the services you use, increases by other people – when you’re already trying to plug holes.

“It feels like a very brutal tax on employing people.

“I don’t think it would be a surprise to people that, after the last few years, we don’t have huge cash reserves on our balance sheets,” he says.

“You look around on a Saturday and the city looks booming, but look on a Monday night and a Wednesday night and it’s a different picture, so you look at what you can do with variable costs to mitigate the situation as much as possible.”

Simply putting prices up, Iain adds, is not the straightforward solution people think: “People can decide to go elsewhere, they can go somewhere cheaper. And there is a limit to what people are prepared to pay – when the price of a pint goes over £6 people will think about how they can get a can of lager from the supermarket for £1!

“You have to be careful you don’t price yourself out of the game; you have to manage margins that are already eroded just to stay open.

“It’s finding that balance while still offering a good deal to your customers. I’m getting the feeling that people think things are too expensive already.”

Iain made some – although not across-the-board increases – to prices before Christmas and has made other changes like stopping weekday breakfasts at Tempest to reduce kitchen costs and reviewing portion sizes.

He admits to having to be creative while still ensuring always that customers get value for money.

“It’s very difficult,” he says, agreeing again with Fiona: “It’s not growth positive, and a lot of businesses may feel it’s hopeless to carry on. We feel we have prepared as much as we can and now it will be a case of bracing ourselves and seeing what happens. It’s hard to know and nothing is guaranteed.”

Being agile and able to adapt and change to create a resilience is key, according to Iain, who believes that there are yet positives to cling to as Liverpool heads into spring and summer, a busy season.

“We are lucky in Liverpool.

“Rents are pretty cheap and people enjoy going out – it’s an inbuilt culture. We’re a social city, an amazing city.

“The city council is doing a lot to bring people in with great events and festivals and the like, and we can hope we don’t have the rail strikes we had last year.”

He smiles: “If the weather continues like we’ve been having over the last few days and it’s good throughout the summer, that will make all the difference. Maybe we all need to go out and do a sun dance?!”