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British pubs and restaurants are facing increased financial pressure from rising utility costs as they struggle to keep their doors open amid an energy crisis that is only expected to get worse this winter.
“The price goes up every day,” Lindsey Armstrong, owner of Champs Sports Bar and Grill in the small north-east England town of Washington, told the New York Times of her electricity contract that will cost her. $ 135,000 per year, a jump from the normal cost of around $ 30,000.
Armstrong says the shortest contract she has been offered is three years.
“The longer I wait, the harder it becomes to make a decision, but I really can’t sign a contract of that length,” Armstrong said, “because I know I can’t afford it.”
WHY THE ENERGY BILL IN EUROPE CONTINUES TO RISE
Union Jack flags hang on a pub window. The number of pubs in England and Wales has dropped to an all-time low, according to a recent assessment.
((Photo by Sebastian Gollnow / picture alliance via Getty Images))
Armstrong says he is considering reducing his working hours and reducing staff, but he is aware that employees are also facing financial hardship due to rising energy costs, including some who are new parents.
“We opened up, we had a really good year, and then having this is only soul-destroying,” Armstrong said, explaining that his pub has had a good year since opening following the coronavirus lockdown. “It is absolutely destructive to the soul.”
James Watt, owner of the famous British brewery and pub chain BrewDog, recently told his customers on social media that the company would close six locations due to “spiraling” energy costs.
“Reality in the hospitality space is starting to bite and bite hard,” Watt wrote on LinkedIn.
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A pub, which has closed its doors to customers, has its windows boarded up in Shepton Mallet, on July 25, 2022, in Somerset, England. Since the year 2000, a quarter of pubs in the UK have closed, totaling over 13,000 locations.
((Photo by Matt Cardy / Getty Images))
According to the New York Times, the CEOs of six large pub chains and the head of the British Beer and Pub Association have called for “swift and substantial” intervention from the government.
Assistance is needed, otherwise “there is no doubt that we will see a huge number of pubs closing their doors forever, leaving people unemployed during a cost of living crisis,” they wrote.
UK residents will see an 80% increase in annual household energy bills, the country’s energy regulator announced Friday, following a record high of 54% in April. This will bring costs for the average customer from £ 1,971 ($ 2,332) per year to £ 3,549.
The blame for the hike is the surge in wholesale natural gas prices sparked by Russia’s war in Ukraine, which is driving up consumer prices and growing economies across Europe that rely on fuel to heat homes. and generate electricity.
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Russian President Vladimir Putin chairs a meeting on the country’s transport industry via a video link in Sochi, Russia on May 24, 2022.
(Sputnik / Mikhail Metzel / Kremlin via REUTERS ATTENTION EDITORS – THIS IMAGE WAS PROVIDED BY A THIRD PARTY.)
However, electricity prices in Europe reached all-time highs months before the invasion which, according to some experts, is partly due to the increased reliance on green energy policies.
Rising energy, coupled with rapidly rising food costs, should push inflation above the 40-year high of 10.1% recorded in July and trigger a recession by the end of the year, the Bank predicted. of England. Charities, public health leaders, and even energy companies warn of catastrophic effects on the poorest people who are already struggling to afford the essentials as wages lag behind.
The Associated Press contributed to this report
