Why closing time is coming earlier than ever for pubs

The finding emerged from a survey carried out by the British Beer & Pub Association, and underlined the lengths operators are now going to as they strive to save costs.

The survey found that some publicans are calling time at a previously unimaginable 8pm because the cost of staying open later on certain evenings is significantly higher than any income they could expect to generate.

The report in The Mirror quoted a range of publicans who explained why they are making radical changes to their hours of operation.

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It raises fresh questions about the future of town and city centres which have been badly affected by the pandemic and long-term decline of the retail sector.

“Sometimes in the winter midweek we have no one through the door, but it still costs us £250 to open,” said Rosie Nagaty of the Old George Inn, Yorkshire.

“We can’t afford to pay staff to stand in an empty pub with the heating and lights on and no customers.”

The 8pm closing time is the latest evolution of a trend which first emerged in the aftermath of the pandemic. No sooner were Covid restrictions lifted in the first half of 2022 than the hospitality industry flew straight into a staffing crisis, with a shortage of workers (initially sparked by Brexit and then worsened by people switching jobs during lockdown) leading to the cost of labour rising sharply. It began to become common for hotels to close down whole floors or restaurants simply because they did not have enough workers.

Fairly soon after, the problem of staff shortages was compounded when other overheads began to soar, most notably the cost of energy but also food, drink and insurance, to the extent that stories of pubs cutting opening hours or closing on certain days became increasingly prevalent.

However, the fact some pubs are now closing at 8pm on the days they are open seems like a new low.

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“A reduction in hours is something we’ve seen in many premises across Scotland,” said Paul Togneri, senior policy manager of the Scottish Beer & Pub Association. “With increased cost pressures, alongside a recruitment shortage it is the only way that some are able to operate unfortunately.

“The freeze on beer duty is a positive and is helping keeping the price of a pint down, but the sector needs meaningful action in the form of business rates relief and a reduction in VAT (value-added tax) to help stem closures in the sector.”

Industry figures contacted by The Herald this week said they have still to see anyone bolting the doors as early as 8pm in Scotland, but the trend of restricted days of operation has been entrenched for some time. Even popular restaurants in Glasgow city centre are closing their doors as early as 9.30pm on some Saturday nights.

And soon the cost pressure on the industry will be ratcheted up further.

While next month’s increase in the national minimum wage will naturally help people who are struggling with the cost of living crisis, it will also be a blow for sectors such as hospitality, for which it represents another cost rise to absorb. The national living wage will rise by 9.8% (or £1.02) for people 21 and over to £11.44 per hour, while for people aged 18 to 20 it will go up by 14.8% £8.60.

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Revolution Bars, the high-street cocktail bar chain, declared in January that the rise in minimum wage will bring a “material rise” in its costs and cast doubt on whether it will lead to “increased discretionary spend” in its venues. On Tuesday, the group effectively put itself up for sale as it told the City it was “actively exploring all the strategic options available to it” in a bid to turn around its fortunes. That followed press reports that Revolution was set to close 20 of its worst-performing venues and holding talks with investors over a fundraising.

Paul Waterson, hotelier and spokesman for the Scottish Licensed Trade Association, told The Herald he has still to see any pubs close as early as 8pm in Scotland, but noted that restaurants and bars staying closed on Mondays and Tuesdays was a regular occurrence.

And he said the rise in minimum wage “will be a problem” for many businesses, declaring that while politicians enjoy taking credit for lifting it, “they are not paying it”.

“At least in England they are getting 75% rates relief that we don’t get,” Mr Waterson said.

Mr Waterson highlighted one industry colleague who made a profit of £50,000 last year but will see that virtually all wiped out this year because of the wage increase, which will cost £45,000 to implement. “He’s got to put his prices up again, or he just won’t make any money at all. He will be lucky to break even,” Mr Waterson said.

“Then he was saying that they are giving £1 [rise in minimum wage] to people but we will have to put all our products up. So it is going to cost him more when they come out anyway, so no one is better off.”

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While the hospitality industry continues to struggle with a heavy cost burden, campaigners are routinely hammering home the need for government support. In Scotland, pleas for 75% relief from business rates, which is currently on offer in England, have been rebuffed, as ministers have made plain their preference to prioritise spending in areas such as the health service.

Mr Waterson, who now believes the hospitality industry is “there to be whipped” by the anti-alcohol lobby, believes the policy is short-sighted. He said: “The only thing that is going to save the high street is hospitality. If you even gave us 50% or 25% [rates relief] and save us for a year, then you are going to make rates money, you are going to make tax [revenue]. If you shut us down you are not getting a ha’penny, then you have all the problems with shops shut and landlords paying their rents. All you have to do is give us something.”

Whether that something will be forthcoming looks unlikely, however.

In fact, in Glasgow there was the very real prospect of a further hurdle being placed in front of the industry. Businesses had been left reeling by a proposal by the city council to extend car parking restrictions until 10pm.

The concern over the move was underlined in a survey carried out by the Federation of Small Businesses (FSB) and the Scottish Hospitality Group (SHG) last week, which found nearly all (97%) of respondents feared the additional restrictions would hurt their business, while more than eight in 10 said it would reduce footfall and turnover.

However, it emerged yesterday that the plans appeared to have been kicked into the long grass, following an angry response from the business community.

Stephen Montgomery of the SHG said the move was a welcome "starting point" but emphasised the need for the policy to be "taken off the table completely to allow the return of consumer and business confidence".

It was a rare victory for business leaders in the fight to keep town and city centres alive, but the war is far from over.