UK pubs feel Christmas pressure as inflation bites

Inside the Mad Hatter pub in central London's South Bank district, everything is ready: the big tree, the bright lights, the fun Christmas signage.

Although the tone may be festive, the mood behind the bar and at similarly adorned pubs nationwide is far less upbeat.

December represents a crucial month for the sector, accounting for as much as 10 percent of annual turnover thanks to Christmas parties -- an institution in the UK -- and other social gatherings.

After the pandemic ruined the festivities -- and revenues -- over the last two years, pubs, bars and other venues are relying on the coming season to help kickstart their longer-term recoveries.

But it looks a tall order in the face of a worsening cost-of-living crisis, predictions the country is already in recession, widespread labour shortages and strikes, including in the key transport sector.

"We're desperately looking forward to a very busy Christmas," said Emma McClarkin, chair of industry body the British Beer and Pub Association (BBPA). The business is sorely needed "after three years of not having Christmas trade," she explained.

McClarkin said bookings were currently about 20 percent below pre-pandemic 2019 levels.

Pubs have been central to British communities for centuries, but their number has been dwindling for years and has plunged to its lowest ever level, according to research published in July.

Despite being forced to close during the pandemic, government support schemes helped provide some financial respite.

But the post-pandemic picture is now mixed, with around 50 watering holes currently shutting down every month.

Marston's Brewery, which owns more than 1,400 pubs, described its Christmas bookings as "encouraging" and above 2019 levels so far.

Meanwhile, the first ever winter World Cup has boosted sales, particularly on days when England have played.

However, the company fears a difficult 2023 amid predictions of a deep recession.

The City of London, the financial hub in the heart of the capital, appears far less susceptible to the growing economic woes.

At The Globe pub, the taps are flowing freely amid a steady stream of Christmas parties, according to the manager.

Budgets in the city can buck the broader economic trend: one office party at a local wine bar cost nearly £20,000 ($24,000), said one waiter, who asked not to be named.

But a few miles north, in the bustling Camden area, the small cocktail bar Crossroads is seeing a drop in business compared even to Covid-interrupted last year.

"Sadly, we were forced to raise our prices in October due to the wholesale prices rising, but the takings have remained the same as last year around this time," said manager Bart Miedeksza.

"Our regulars (are) spending just as much time by the table in our venues, but consuming less."

Further north at The Stag, in middle class Hampstead, bookings are comparable to before the pandemic.

But the focus is on making offerings affordable for increasingly "budget conscious" customers.

"We've been experiencing inflation in terms of the food pricing, in particular butter or cooking oil, since (Russia's) Ukrainian invasion," said manager John Perritt.

Inflation is running at 11 percent in the UK and up to 60 percent for some food staples such as cooking oil and pasta, squeezing budgets and profit margins.

The Stag, a local choice for groups of public sector workers at a nearby hospital, is trying to adapt to these new economic realities.

"We do packages as affordable as possible," said Perritt, adding that this year it is offering a one-course Christmas menu for £20, which rises to ₤36.50 for more courses.

Back at the Mad Hatter, John Paul Caffery, the owner of a technology consulting company, noted this year's Christmas party "is definitely more expensive than last year".

"We've tried to overcome that by going to a place that's fixed on cost," he added.

Christopher Jones, a 54-year-old Welsh town planner on a business trip to the capital, is set to have a small party with his colleagues and clients at their local pub -- where the price of a pint has gone up by ₤1.

"Coming out of Covid, you've got to enjoy your life," he explained.

"But at the same time, just be a bit careful around budgets and about spending."