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Glasgow Live
Glasgow Live
National
Brian Ferguson

Glasgow hospitality business could close in January and February to save cash

Hospitality businesses in Glasgow could close for the first two months of the year to save money.

The outlook for some could be so bad they may even shut for good.

The stark reality for many struggling to cope amid soaring energy prices was top of the agenda at a summit in the city, where business owners revealed they have experienced spiralling costs, with some bills rising by almost 600 per cent.

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The Night Time Industries Association (NTIA) heard the crisis is worse than covid for the trade, with a third who took part in a survey in the summer admitting they are "unsure" if they can survive the next year.

Gavin Stevenson, vice-chair of the NTIA in Scotland, said: "We have probably never seen such a precarious time for large parts of the sector.

"We're seeing more and more reports of businesses closing.

"Everybody that is still open now is definitely going to try to get through the festive season.

"But January and February are definitely going to be worrying times in terms of whether people will be able to stay open and pay their bills.

"Some may choose to close down for the traditionally slower months of the year.

"Others may be forced to acknowledge that their businesses are just not viable with electricity bills that are 200, 300 or 400 per cent higher than what they were.

"It will be very interesting to see what comes out of the Chancellor's forthcoming statement and what long-term cushioning might be availability for hospitality, which by their nature are energy-intensive businesses."

Louise Maclean, business development director at the Signature Pub Group, which runs businesses across Scotland, including The Spiritualist in Glasgow, said: "The bottom line is that our energy costs are now £1million higher across our business compared to where we were in 2019.

"When we add in all the other additional costs we have to deal with now, with things like inflation, our additional costs are nearly £2.8m. We didn't make that in profit in 2019. The maths just don't work.

"We are now at the stage where we are only trading profitable hours. We used to be open from 9am to 1am, but we've not done that since the pandemic.

"At the moment we have to have one eye on the future and have to think that in a couple of years we will come out of this with a business at the end of it. We have to insulate our business.

"I kind of want to say to the Government 'do you want a hospitality sector? Do you actually want a thriving hospitality and tourism industry?' I cannot see any evidence that they do."

Stephen McGowan, one of Scotland's leading licensing lawyers, said the rise in energy costs was the number one factor which had left businesses in a prolonged state of "crisis".

He told the summit: "I have a number of clients who have said to me that they are going to close because they cannot afford to pay their bills.

"I have a number of clients who have said to me that they are going to close maybe for three days a week, or are going to close for a certain period perhaps over the winter and maybe reopen at some point towards Easter.

"Different parts of the country may be affected in different ways, but it is a great concern for those businesses and in turn the people they employ."

Michael Kill, chief executive of the NTIA, said: "It just feels that there is an absolute wilful intent to collapse some parts of our sector.

"It is going to be very difficult for many businesses to survive unless there is a broad spectrum of support.

"There is a false economy at the moment. We can't staff businesses well enough at the moment.

"Profits are eroded. People may think that venues, bars and restaurants look busy at the moment, but the reality is the profit line is so small when we get to January we are going to see a considerable collapse without intervention."

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