Pubs and restaurant owners in Scotland are losing business and they are blaming it on the boom in weight-loss drugs, according to a new report.
In its Summer On-Trade Market Insight Report, the Scottish Licensed Trade Association (SLTA) highlighted the continued challenges faced by Scotland’s pubs, bars and licensed hospitality venues in the light of continuing rising costs, and a lack of business and consumer confidence.
The survey was conducted shortly after the Fifa World Cup and Glasgow Commonwealth Games and covered over 300 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses.
SLTA managing director Colin Wilkinson said, “A new trend has also emerged with 16% of respondents saying visits have declined because of the weight-loss drugs phenomenon.”
In addition, 22% stated that their customers are more discerning.
The survey contains key insights into the continued challenges facing hospitality, driven by costs that are increasing significantly above inflation, and visitors having less disposable income.
Wilkinson said: “The World Cup provided a brief sales boost, but the broader economic outlook remains challenging. Members report weak consumer confidence as global events prolong economic uncertainty."
On the other hand the Commonwealth Games did nothing for sales in pubs and bars.
Trading conditions remain challenging with 58% of outlets in decline.
Costs continue to rise with 97% of outlets reporting year-on-year increases, and 57% of outlets facing cost increases significantly above UK inflation rates.
Wilkinson pointed out that hospitality businesses in Scotland face higher commercial rates and energy charges than our counterparts across the rest of the UK.
“Business profitability remains a major concern, so we urge all parties within the Scottish Parliament to place early rates reform, and within the Westminster Parliament a reduction in VAT for the licensed hospitality sector, truly at the heart of their economic strategies."
Both governments have recently stated again that one of their core priorities is growing the economy. Well, the time is now – no more just ‘talk the talk’, it’s time to ‘walk the walk’,” he said.
Wilkinson also highlighted that in Republic of Ireland, a key competitor to Scotland, the government has reduced VAT rates for hospitality industry.
The report has urged Prime Minister Andy Burnham to focus on reducing VAT in hospitality, fast-track the review of the commercial rating system, harmonise rates across the UK, and reverse employers’ National Insurance increases.
