4 ways pubs and bars are tackling rising costs

Running a pub or bar is a mix of art and admin: from pulling pints, curating playlists, food prep and event planning. But while customer expectations rise, so do overheads.

From energy bills to employers’ National Insurance (NI) contributions, prices are rising for pubs and bars. On the flipside, running a place where people can unwind, make memories and have a great time brings limitless positives.

Given the news that pubs and music venues in England will be given a 15% discount on their business rates bills for the next two years from April, we surveyed over 400 hospitality businesses around the UK*, to get the inside scoop.

Competing with the chains

Competition from larger brands is one of the top three concerns for the hospitality businesses we spoke to. So how can you combat the corporates?

For independent pubs and bars, this often means going niche or building a loyal community through events, personality and local focus.

Pubs and bars can be the cornerstone of a neighbourhood, and there are plenty of ways you can build a schedule that engages the locals. For example:

• Arranging a weekly pub quiz with fun prizes
• Live music or karaoke nights
• Happy hour on certain days and times
• Showing sporting events
• Hosting a darts, pool or other games night — like a Dungeons and Dragons event
• Tasting evenings in collaboration with suppliers
• Drag shows or comedy nights
• Crafting afternoons in collaboration with local artisans
• Supper clubs or specific dining experiences, if you’re registered to serve food

You know what will resonate with your community, so try out some events to bring in new faces and regulars to see what works. Give new events a few weeks or months to settle in, and don’t forget to spread the word using social media, word of mouth and posters in your windows or on your chalkboard.

While your budgets and margins might be tighter than the big corporates, aim to lean into your neighbourhood appeal. Make your space cosy and welcoming, from gentle lighting and roaring winter fires to local tipples and smiling staff.

Weekends mean everything

According to our survey, Friday and Saturday are peak trade times for hospitality. That said, over a quarter of businesses say demand varies week by week.

Whether it’s down to the weather, what’s on the telly or a last-minute football fixture, inconsistency is part of the game. This means that everything from staffing and supplies can be hard to plan for.

But by hosting a regular schedule of events, as mentioned above, you could fill in some of the gaps in footfall and have a more balanced schedule. This makes planning for stock and staff simpler.

Another way to map out your peak days in advance would be to operate a table booking system.

Consider allowing your customers to book tables in advance, through platforms like OpenTable, Resy or LIBRO. Knowing how many tables you’ll be serving each night, especially at peak operating times, can help ensure a smoother service and not running out of stock.

Customers are changing, fast

Our research found that price sensitivity is the biggest shift in customer behaviour this year at 44%, closely followed by more spontaneous visits at 35%. That’s a tricky combo for bar managers, who need to balance staffing, stock and spend — all while keeping the good vibes going.

It’s no wonder that customer price sensitivity has increased — it has for us all, and spending on entertainment, especially since the pandemic, is often the first to go.

To combat customers opting to pick up some bevvies from the supermarket instead of having a few pints at their local, there are a few strategies you could put in place. For example:

• Use smart pricing to give customers a reason to come early, like half-price cocktails before 7pm. It can fill the floor and add a few extra rounds to the average spend.
• Analyse your menu to work out which items are price-sensitive and which aren’t. Once you know what your guests will pay more for without flinching, you can make selective, high-margin increases.
• Think premium, but with purpose. Higher prices are easier to swallow when they’re served with flair. Consider developing a signature cocktail with hand-crafted infusions or dishes built around a standout seasonal ingredient. The trick is to give guests something they can’t get elsewhere — and make sure they know why it costs that bit more.
• Make the menu work harder. Menu design isn’t just about what you offer — it’s about what customers notice. Use the layout, typography and positioning to draw attention to your most profitable items. Consider menu bundling — like platters and combos — to give you the chance to increase spend while still offering a good deal.
• Removing currency symbols from your menu makes prices feel softer — less like a transaction, more like part of the experience. It’s a subtle shift, but one that can make a real difference to how people spend.

Pricing shouldn’t fall only to the customer. Instead, consider your waste — both in what you serve and utilities. A case study by the Carbon Trust found that UK businesses could reduce energy bills by up to 20% just by improving energy efficiency — often through no- or low-cost changes.

Cover when it counts

With slim margins and unpredictable footfall, one fridge failure or staff illness can mean lost revenue — and that’s no small thing. Our survey showed that staff shortages and equipment breakdowns (both at 27%) were the most common challenges in the past year.

Of those we surveyed, two-thirds of hospitality businesses (66%) say an unexpected setback would have some impact on them, while one in ten admits it would hit them hard without the right cover or savings.

This is where insurance can come in. The right cover won’t pull the pints for you, but it can take the sting out of a sudden setback. There are several covers bars and pubs might want to consider, including:

• Employers’ liability insurance is a legal requirement for most employers in the UK. If you have staff — whether part-time, full-time, permanent, temporary or apprentices — you may have a legal obligation to have this insurance and have an employers' liability insurance certificate to prove it.
• Public liability insurance is a common cover for businesses that involve contact with members of the public. It’s designed to cover claims made against you by members of the public for property damage and accidental bodily injury, illness, disease or even death as a result of your work.
• Business interruption insurance can reimburse your lost income for up to 18 months following damage to your premises. Say your bar gets flooded after a huge storm. Or your fridges break down overnight, leaving you unable to trade. Or your tilling system breaks down because of a power surge that wasn’t your fault.
• Contents insurance can cover items like tables, chairs or bar stools, and pretty much all other stuff in, on or around your premises that you own or are responsible for, including your glassware and silverware — even beer taps.
• Business equipment insurance can cover the portable electronic tools you need to perform your job from theft, loss or damage.

Last orders

The good news is that most hospitality businesses we spoke to feel positive about the future, with nearly seven in ten describing themselves as either very (25%) or somewhat (44%) optimistic.

On top of that, more than half of hospitality businesses (53%) plan to grow in the next 12 months, while a further 37% expect to maintain their current operations.

There’s a lot to juggle. Operating costs, suppliers, invoices, cleaning, menu creation, staffing, payroll, insurance… it all adds up. But the overall outlook is positive, especially with the 15% discount on business rates, which is worth £1,650 for the average pub.

Small tweaks can go a long way to grow your business, adding new streams of revenue and ways the community can use your venue to celebrate. And for those things you can’t plan for, there’s insurance.

Want more tips for pubs and bars? Read our 6 top tips for running a hospitality business.

*Superscript surveyed 402 hospitality business owners and managers across the UK via Attest.