On the same day Chancellor Rachel Reeves announced plans to kickstart the UK’s floundering economy, the Scottish Licensed Trade Association (SLTA) revealed in its latest Market Insight Report that 80 per cent of survey respondents expect the Scottish economy to decline – with six per cent considering closing their premises.
The SLTA's report gives a snapshot survey of the challenges faced by Scotland’s pubs, bars and hospitality venues in the year 2024, with a deep dive into the festive trading period, and the expectations of the sector in 2025.
It reveals that the Scottish licensed hospitality industry ventures into 2025 with concerns over continued pressure from rising costs, staff availability, changes to employers’ national insurance contributions, and low economic confidence.
The survey’s responses represent over 400 pubs, bars, restaurants and hotels, covering the full spectrum of licensed hospitality businesses throughout the country, and contain key insights into the continued challenges facing hospitality, driven by a challenging economic environment and visitors with less disposable income.
“Christmas and New Year was a difficult period for our industry with a universal theme of visitors spending less time in outlets and spending less on food and drink. We did see an upturn in lower-strength products, but this was offset by customers having ‘one course instead of two," said Colin Wilkinson, SLTA managing director.
“Over the course of the calendar year, 49 per cent of outlets were down year on year, but over the festive period this increased to a worrying 69 per cent of outlets reporting a decline.’’
Mr Wilkinson added: ‘‘We also continue to face rising costs and staff shortages – 38 per cent of outlets told us that staff availability is impacting upon opening hours, up from 23 per cent in the summer. We are also seeing increased costs from suppliers and government increases in taxes.
“Regarding the pending changes to NI contributions, 75 per cent of outlets expect new employers’ NI costs to impact on their staffing levels. This will make it even more difficult for businesses to open their full operating hours, remain competitive and get more people into our venues.
“We are also facing the harsh reality that six per cent of respondents are seriously considering closure.”
The SLTA has been conducting Market Insight Surveys for nearly 10 years with the analysis based on quantitative research from outlets covering the length and breadth of the country. This survey is supported by major food and drink chains, and independent pubs, bars and hotels, across Scotland’s licensed hospitality sector.
Commenting on staff availability and how the government can support the sector, Mr Wilkinson added: “One proposal that the SLTA supports is the introduction of a Scottish hospitality workers’ visa, which could help to alleviate staff shortages.
“The hospitality industry fulfils a critical role in Scotland’s food, drink and tourism industry, and we are keen to work with government to explore opportunities to protect jobs in this vital sector and help businesses to work to their full potential.”
