Hospitality leaders issue stark warning over rising bills and unsustainable tax burden
Hospitality businesses across Southampton have warned they are “close to a crisis” as rising taxes and operating costs squeeze already thin margins. Industry figures say recent changes to business rates combined with higher VAT, labour, energy and supply costs have pushed many venues into an unsustainable position.
Owners and campaigners from restaurants, cafés and bars told the Local Democracy Reporting Service that after a period of recovery following the pandemic, the sector now faces fresh pressures that could force some operators to close their doors for good.
“We’re really, really close to a crisis situation,”
said Spencer Bowman, chairman of the Southampton Hospitality Action Group and founder of speciality coffee chain Mettricks. He warned that despite assurances from the government, recent measures have not delivered relief for the sector.
Mr Bowman said some operators were facing significant increases in business rates. He cited his own business as an example, saying Mettricks will pay more than £60,000 extra a year in rates across four sites.
Costs running above turnover, say restaurateurs
Long‑standing restaurateur David Hall, co‑founder of Casa Brasil, told reporters that many operators are now spending more than they take in. “Most businesses’ costs were running at 110 per cent of their turnover,” he said, pointing to the combined effects of energy prices, food inflation and staff costs.
He added that the sector remains vital to the city, noting Southampton’s visitor economy: “Southampton needs us. Southampton is a tourist city with the cruise ships coming in and the hotels. It is very important for Southampton to have good quality venues and restaurants.”
- Business rates: cited as a primary concern, with some firms facing large, sudden increases
- Operating costs: rising VAT, energy, food and labour costs squeezing margins
- Local impact: closures risked in the city centre, affecting employment and the visitor economy
What this means locally
For residents and visitors, the consequences could include fewer independent cafés, restaurants and bars operating in Southampton’s city centre and waterfront areas. Small and medium hospitality operators often operate on narrow margins, so higher fixed costs such as business rates can be decisive.
Owners say long‑running pressures on staffing and supplies have been compounded by policy changes they describe as untimely. While national measures can aim to rebalance public finances, the local effect — particularly for businesses still recovering — is acute.
| Issue | Impact cited by industry |
|---|---|
| Business rates | Significant increases for some operators; example: Mettricks facing £60,000 extra |
| Operating costs | Energy, food and staffing pressures pushing costs above turnover |
Local leaders and business groups have called for targeted support and clearer engagement between government and the hospitality sector to avoid closure of long‑standing venues. For now, owners say they are attempting to absorb costs where possible, while warning that there is little more room to manoeuvre.
The developing situation is one to watch for councillors, business support organisations and residents who rely on a vibrant hospitality scene in Southampton’s economy and cultural life.
