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News Agenda: Are Christmas spirits helping north pubs or is the hospitality trade facing an unhappy New Year?

Neil Drysdale
Pint of beer on a bar.
Pub energy costs are soaring. Image: Shutterstock/Stuart Monk.

It’s one of the staples of a Scottish Christmas; the friendly invasion of pubs, clubs and hospitality hubs by revellers in search of a festive party atmosphere.

Yet, there’s a dark cloud hanging over the sector in the aftermath of two years of being ravaged by Covid as they strive to attract customers who themselves are grappling with a cost-of-living crisis, spiralling bills and the need for belt-tightening in a recession.

Just to add to the noxious mix which is affecting myriad businesses from Aberdeen to Inverness and Oban to Orkney and throughout the Highlands and Islands, there have been regular rail strikes which have made travel impossible in recent months.

Few signs of a happy new year

Then, as if to compound the perfect storm of difficulties, large parts of the region were badly affected by floods last month, followed by blizzards at the start of the annual splurge of Yuletide carousing which forced the cancellation of many functions.

The Press & Journal spoke to several hospitality organisations which are fighting to avoid a perpetual hangover. And a clear picture emerged: whatever short-term relief is offered by Christmas sales, there are genuine fears about what will happen in 2023.

BrewDog’s Hop and Anchor pub in Aberdeen was one establishment to close down this year.

A snapshot of licensed premises this week outlined some of the issues. One pub owner said: “It has been much better than 2020 or 2021, but it couldn’t have been worse.”

Another told me: “Christmas meal bookings are just about okay, but everybody is talking about prices and nobody is hanging around after their food.”

And a hotelier stated: “We’ve actually cut our prices, but it hasn’t made any difference. The money isn’t there and we understand the public have financial worries. But we can’t continue to operate in this way because it is slowly going downhill.”

Wintry conditions caused chaos in the north and north-east in December 2022.

Cru Holdings is a prize-winning company which operates The Imperial (formerly Bar One), Scotch & Rye, The Keg, Prime, The Wee Bar and The Whitehouse in Inverness, and also runs The Classroom in Nairn. However, the lessons which it is absorbing are harsh and there have been precious few signs of a festive bounce in custom.

Managing director Scott Murray told us: “In terms of business, I would say that, on the whole, it has been fairly stagnant. We haven’t seen the huge rush we would expect in December, which will have a lot to do with the cost of living. Combined with the increase in overheads, lack of any government support and continued staffing issues, it means that we are preparing for a very tough couple of years.

We need a vision for the future

“We have, and always will, react and innovate to try and ensure our survival, like our repositioning of Bar One to The Imperial to cater for a wider range of clientele.

“However, there is a limit to what we can do when operating pressures outwith our control are stacked against us. We really need some sensible, long-term, big-picture decisions made at local, national and UK government level to ensure that our, and other people’s businesses, have the best chance of survival.”

Scott Murray, the managing director of Cru Holdings in Inverness. Picture: Sandy McCook.

In Aberdeen, meanwhile, any Christmas spirit has been patchy at best and unseasonably quiet at worst. Allan Henderson, The McGinty’s Group director, has warned repeatedly about the lack of government assistance for the bar trade, restaurants and other venues, but so far, his pleas have fallen on deaf ears.

In June, he wrote in the Press & Journal: “Having overcome the challenges of Covid, we now face another tough test with a change in people’s social behaviour and spending habits, along with rising living and energy costs.

No support and no future?

“The rise in energy bills will significantly increase our business operating costs and we need to work out how we can combat this without impacting our customers. It is vital that the industry gets the appropriate support to ensure businesses can trade viably.”

But, if that’s fine in theory, how has it worked in practice?

Allan Henderson outside McGinty’s Group restaurant The Esslemont on Aberdeen’s Union Street.

He said on Wednesday: “Business levels are clearly up on the last two Christmas periods which were devastated by the pandemic though not quite at pre-Covid levels.

“But the heavy snow which the city suffered in the previous week had a major impact as restaurants all had numerous last-minute cancellations.

“Customers have been happy to get out and enjoy their Christmas parties, though many are heading home earlier or avoiding town due to the lack of taxis in the city centre.

The problem needs solutions quickly

“It is an issue which must be addressed as a matter of urgency, because it is seriously affecting the trade. Hospitality businesses are all facing inflationary pressures, be it energy, food or wage costs.

“Last week’s Scottish budget [delivered by John Swinney] failed to give any support to our sector, unlike the 75% rates relief which England is introducing in April 2023.”

The message seems clear: plenty of places will be closing their doors after ushering in the New Year with genuine anxieties that they will not survive the rest of the winter.

Stuart Devine has warned about the harsh economic climate affecting hospitality. Picture by Wullie Marr.

Allan Henderson is among those attempting to revive the fortunes of Union Street and the surrounding area; a once-thriving locale which has become the Miss Havisham of the Granite City without any great expectations of an imminent recovery.

And his concerns are shared by Stuart Devine, the operations director of the Ashvale chipper, which is offering festive attractions, but preparing for a chilly next chapter.

He said: “Trade has been steady enough and, obviously, we are not too affected by train strikes and the like. The weather did not help last week which would probably have been a cracking week. However, it was just above average as many elderly people wouldn’t leave their house due to the shocking condition of our roads and pavements.

Stuart Devine is the operations director at The Ashvale in Aberdeen. Picture by Wullie Marr/DC Thomson.

“But the reality is that times are ridiculously tough right now throughout hospitality and everyone, with very few exceptions, is surviving by the skin of their teeth.

“This is no way to run a business and many people may simply throw in the towel and decide that it’s just not worth the hassle.

“The Government have been non-existent coming forward with help and this will lead to an extreme lack of investment and many thousands of jobs [in the sector].

“This will not be forgotten at the next general election.”

Many pubs are at risk of closure in the years ahead.

There’s no doubt that the industry is in a perilous state and one detects a tangible fury at the dearth of business support which is on offer from Westminster or Holyrood.

Many in hospitality are on the precipice and have probably resolved that this will be their last Christmas of fighting against escalating costs and lower profits, particularly with financial projections of worse to come in the next 12 months.

Few are likely to be toasting the arrival of 2023 with anything but apprehension.