The Brexit effect is hitting Scotland’s licensed trade

The Scottish Licensed Trade Association say Brexit is already having a massive impact on its members.

The SLTA today releases its Christmas/New Year On-trade Market Review, sponsored by KPMG UK, containing key insights on Scotland’s burgeoning food and drink sector and the Brexit impact.

Some key points from this were:

• 17% of hospitality outlets in Scotland have already seen a negative impact from Brexit – fewer bookings and a loss of staff
• 40% of outlets anticipate the loss of staff
• 65% expect wider staffing issues to continue
• Generally there is a significant increase in outlets showing growth – 48% are in growth versus 39% at end of 2017, and 28% at end of 2016.

Colin Wilkinson, managing director of the SLTA, said: ‘Our survey, which covers all types of licensed premises, is an indicator of the key challenges facing the wide range of small to large businesses who trade within the wider hospitality sector.

‘Our survey is based upon quantitative research from 500 outlets covering the length and breadth of the country and is supported by many of the major chains and our partners in the Scottish Bartenders Network.

‘After a number of years of decline, our summer report indicated a recovering market and this trend has continued over the festive period, with 69% of outlets either growing or stable at Christmas versus 59% for the whole of 2018.

‘Amongst the key drivers of the performance were locally sourced gins and beers, whilst our industry also benefitted from embracing digital trends. With recent research indicating 71% of foreign tourists visit Scotland’s pubs and bars, we are proud of our continuing support for Scotland’s Food and Drink 2030 Ambition.

‘However, there are concerns, particularly around Brexit and in rural outlets, where pubs are critical to the community, and key employers.

‘Within rural/ countryside pubs over 20% are in serious decline. Our members are also concerned about Brexit, with 40% anticipating losing staff with whom they have invested in training and 17% already seeing negative impacts.

‘Looking forward, we anticipate a continued recovery in 2019 with the growth being led by food, online bookings and locally sourced gins and beers.’

The report is the latest annual review from the SLTA and provides key insights on food and drink performance directly from front line retailers across city centre locations and rural locations.

The sponsors of the survey are KPMG, and Alistair McAlinden, head of hospitality & leisure for KPMG

LLP in Scotland, added: ‘It is heartening to see continuing signs of growth in the sector and particularly that Christmas trading appears to have been positive. Clearly, trading conditions remain very challenging for out-of-town operators.

‘Unsurprisingly, Brexit has been cited as a key challenge, with associated staffing-related considerations of most concern. Whilst uncertainty persists, it remains unsettling for business owners and employees alike. In order to provide necessary practical support to staff and to minimise potential disruption, operators should seek to understand options for employees and the possible cost implications. Business advisors can provide crucial support in this regard.

‘Notwithstanding Brexit concerns, cautious optimism is continuing to build amongst operators, with two-thirds of respondents indicating they expect stability or growth during the year ahead.

‘To achieve this, a focus on the customer experience; relevance and variety of offering; and digital capability will remain key factors during 2019 and beyond.’

Colin Wilkinson added: ‘The SLTA has been the voice of the licensed trade in Scotland since 1880, and this report demonstrates our ambition for retailers to work with manufacturers and brand owners by sharing the front line key insights which our retailers are uniquely able to provide to manufacturers and wholesalers.’