A pubs and restaurants leader is calling for a cut in VAT and a reversal of the national insurance hike after a survey said the number fearing closure has doubled.
The Scottish Licensed Trade Association (SLTA) said 75% of outlets had seen profits fall this year after the Chancellor imposed higher employment costs.
Colin Wilkinson, managing director of the Scottish Licensed Trade Assocation, said Holyrood also needed to cut business rates.
Some businesses have reduced opening hours in order to stay solvent. The SLTA said that one-third of those who responded to its survey have reduced staff numbers because of the higher employment costs.
The Chancellor’s increase in employers’ national insurance contributions and lowering of the threshold when they apply has been a particular blow to the hospitality and retail sectors.
SLTA’s survey of 350 operators revealed that the number of members facing closure rose to 14% from 6% in January.
Mr Wilkinson said the latest findings are the worst in the decade the organisation has been running its market research.
He said: “These insights are extremely concerning and the only word to describe the current trading conditions is ‘brutal’.
“Spiralling costs to businesses from the chancellor’s hike in employers’ NICs in the autumn budget, which took effect in April, alongside increases in the national living and minimum wage, are having a devastating impact on Scotland’s pubs, bars, hotels and hospitality venues.
“Businesses are reporting lower income as a result of current low consumer confidence and reduced footfall.”
Murdo Fraser, from the Scottish Conservatives, criticised Holyrood ministers for not passing on the business rates relief which is available in England and also suggested the NI hikes imposed by Westminster are “squeezing the life out of pubs, bars and restaurants across the UK”.
He added: “Pubs and restaurants are not only crucial to our economy, they are the focal point of communities up and down the country and we can’t afford to lose them.”
Retailers get brief uplift
Warm weather and the Women’s Euros football tournament gave UK retailers a lift with total sales up by 2.5% year on year in July, against a growth of 0.5% in July 2024. This was above the 12-month average growth of 1.9%.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Food sales did well in early July thanks to warm weather and a packed sporting schedule, though this momentum failed to hold for the rest of the month.
“Rising food inflation meant increased spending was more a result of higher prices than improved demand. Fashion sold well early in the month, but deteriorated as weather worsened.
“With sales growth at these levels, it is barely touching the sides of covering the £7bn new costs imposed on retailers at the last Budget.
“If the upcoming Autumn Budget sees more taxes levied on retailers’ shoulders many will be forced to make difficult choices about the future of shops and jobs, and ongoing pressure would push prices higher.”
Mackie’s sales rise
Family-owned Mackie’s of Scotland sold more than 1.9 million litres of ice cream during July, achieving a new all-time monthly sales record.
The standout month comes on the back of a hot summer, with the UK basking in its warmest July since 2019.
Mackie’s has also significantly expanded its presence in major supermarkets and adding further momentum was the roll-out of its biggest-ever outdoor marketing campaign.
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