Three out of four night time businesses on “financial cliff edge” due to inflation
Three out of four night time economy businesses in the UK are on a “financial cliff edge” as a result of inflation, according to the Night Time Industries Association (NTIA).
A flash poll generated by NTIA over the last four days (September 16-18) is said to have given a “clear indication” of the current impact cost inflation has had on such businesses across the United Kingdom.
Out of the 300 businesses surveyed, 47.7 per cent are barely breaking even while 24.8 per cent are losing money. According to the poll, 23 per cent would not last more than a few months under the current operating cost levels. 40.6 per cent of businesses would not last more than two to three months.
Additionally, 80.6 per cent of businesses have seen a decrease in footfall with 82 per cent reporting a decrease in revenue over the last three-month trading period.
NTIA asked the participating businesses what action would have the greatest impact on their business survival. 84.3 per cent said VAT reduction, 66.8 per cent said a freeze/cap on energy, 59.4 per cent said business rates relief extension, and 31.8 per cent said National Insurance reduction.
Overall, six per cent answered ‘other’ which includes grants, Corporation Tax reduction and a freeze on loan payments.
Michael Kill, NTIA CEO, commented: “As the number of failing businesses we engage with escalates on a day-to-day basis, with many business owners and operators emotionally and mentally drained from over three years of uncertainty, questions are quite rightly being asked of the government and its plans for the sector.
“Time is quickly running out, with hundreds of businesses already unable to hold on, making irreversible decisions about their future, with thousands of jobs lost or at risk.”
Kill continued: “We have now reached such a crisis point that only immediate and large-scale interventions can save huge parts of the sector, with substantial cuts to VAT, an extension of business rates relief and a meaningful energy price freeze for Small Medium Enterprise businesses which is affordable.”
The NTIA has called on the UK government to outline “a concise and detailed plan” on how they will support these businesses through the current crisis this Friday (September 23). “Nothing less than this is acceptable,” Kill’s statement concluded.
Last month, five organisations representing the UK hospitality sector penned an open letter to the UK government, highlighting “rocketing energy prices” that are forecast to become “a matter of existential emergency” later this year – and demanding that the government act soon to prevent a catastrophe to UK culture.
Music Venue Trust (MVT) CEO Mark Davyd spoke to NME at the time about the true threat posed by the looming price rise. He compared it to the COVID pandemic, which at one point saw 93 per cent of the UK’s grassroots music venues under threat of being closed forever due to losses caused by restrictions.
Mark Davyd explained: “It feels weird to say it, but unlike during COVID when you could go, ‘OK, we need to raise some money now because in a year’s time the venues will be open’, we can’t do that now because they’ll have to pay another electricity bill next year and the year after that, obviously. I can’t see any end to this unless venues put their prices up.”
The UK music industry has also recently spoken of how the government’s inaction regarding Brexit touring issues is “strangling the next generation of UK talent in the cradle”.