The Night Time Industries Association (NTIA) has said that businesses in the sector lost a fifth of their trade over the festive period.
While New Year’s Eve performed better than expected with trading down by only 16% compared to 2019, the month of December was underwhelming for trade due to consumers having less disposable income, trade strikes and inflation.
December’s trading performance was down 21% compared to 2019.
The findings are detailed in a flash poll of 200 members carried out by the NTIA to gauge the current state of the night time economy.
With the continued pressures surrounding travel strikes and the subsequent disruption, the economic climate and even the weather, the NTIA found that 53.7% of respondents did not make enough profit to cover cash reserve requirements for the slower periods. The poll also found that 20.9% barely made enough to cover cash reserves and 25.4% did make enough.
Some 46.3% of respondents felt trade had been impacted by customers having less disposable income, while 26.9% believed it had been impacted by cost inflation. Another 16.4% attributed the lull in trade to industrial action and 6% said the weather also had an impact.
The NTIA asked respondents how they felt the UK Government could help in the current economic climate, with 85.9% suggesting a VAT reduction, 60.9% arguing for an energy freeze and 28.1% advocating for an alcohol duty freeze.
Michael Kill, chief executive of the NTIA, said: “Following a flash poll of members, over 50% of businesses have not been able to build the necessary cash reserves required to survive early 2023, with over 50% of respondents suggesting that they only have enough to survive the next two months, as night time economy businesses see a 20% drop in trade across the Christmas period.
“With operating costs continuing to increase, rent and VAT due in January and the media talking about the government halving the current energy subsidy scheme, we are faced with a challenging Q1 2023, with many trying to find a pathway through the uncertainty.
“It is clear that inflationary pressures, both business and domestic, have caused the most damage, with industrial action impacting cities and large towns reliant on consumer mobility at night.”
Kill added: “This is one of the biggest challenges the industry has faced, for many a greater crisis than the pandemic, with many businesses being left on the edge trying to survive.”