‘Devastating’ tube strikes: Pubs brace for 40 per cent sales hit
London’s pubs and restaurants are bracing for a knock of as much as 40 per cent of daily sales from this week’s tube strikes as industry leaders warn of the “devastating” impact on hospitality.
The capital’s hospitality industry is set to be the hardest-hit from the industrial action, which is due to begin at noon on Tuesday.
Leading trade body UKHospitality said London’s landlords can expect to take an almost 40 per cent hit from the strikes, and warn this piles on the existing pressures caused by the Iran war and April tax rises.
As much as 38 per cent of zone one pub and bar sales are set to be wiped out by the strikes, while central coffee and sandwich shops are bracing for a 34 per cent sales hit, according to UKHospitality data.
Restaurants in zone one can expect to lose 29 per cent of sales, while food delivery and takeaway firms could see incomings dip by 22 per cent.
Tube strikes have ‘devastating impact’
Kate Nicholls, the chair of UKHospitality, said: “Tube strikes have a devastating impact on London’s hospitality businesses.
“Commuter footfall is almost non-existent and families cancel plans to visit the capital. The cost of strikes can stretch into the millions – as we saw when strikes hit the sector a couple of years ago.”
Some forecasts suggest the impact on hospitality could be even worse than a 40 per cent sales loss.
Reservations at bars and pubs in the capital fell by up to 67 per cent on strike days last year, according to Access Hospitality.
Square Mile pubs to take hit
Landlords in the Square Mile could be most at risk from the strikes because they rely almost exclusively on commuter footfall.
Carl Hanley, manager of the Hand & Shears pub in Farringdon, told CityAM: “If the strikes go ahead it always lowers the amount of people attending work, which definitely lowers the amount of people in pubs, restaurants and cafes.”
He said the strikes also affect hospitality staff, because pubs and restaurants can be forced to cancel shifts at the last minute if they see their income fall dramatically.
London’s pubs add around £80m to the economy between Tuesday and Friday every week, according to the British Beer and Pub Association (BBPA).
BBPA chief executive Emma McClarkin said: “At a time when so many locals are already operating on a knife edge because of huge costs, significant disruption to trade will be acutely felt.
“It’s vital that the overall cost of doing business comes down, which is why we’re working with the government on ways to support the pub, including permanent business rates reform, a cut in beer duty and VAT, and a reduction of the regulatory burden. “
Strikes add to energy bill fears
Lobby firm BusinessLDN said the strikes will damage the pubs, museums and theatres that drive London’s economy.
Ed Richardson, BusinessLDN’s director of transport, said: “At a time when the economy is weak and firms are already dealing with the economic fallout from the war in Iran, these strikes are a damaging own goal for the capital.”
The tube strikes come weeks after a slew of April cost increases came into force, including higher business rates and increases to the minimum wage.
Two thirds of hospitality businesses will be forced to cut jobs and one in seven will shut altogether because of these cost hikes, UKHospitality has said.
Hospitality firms are bracing for higher energy bills as a result of the Iran war, but new data shows that the number of pubs and restaurants declaring insolvency was rising even before the conflict broke out.
This week’s tube strikes are all but set to go ahead, after talks between the National Union of Rail, Maritime and Transport Workers (RMT) and Transport for London bosses reached an impasse.