The chairman of highly successful Bristol-based all-day café/bar chain Loungers has told of his fears for the future of small hospitality firms as the recent change of government is unlikely to ease their plight.
Alex Reilley said increases in the National Living Wage and the “lack of any direction” from Labour on business rates meant there was little prospect of relief in the short term for smaller operators in the sector. 
In comments posted alongside the group’s latest financial results – which showed a record year for sales, profits and site openings – he said pressures continued to mount on the “very beleaguered” industry.
“It feels like only yesterday that we were ourselves a small business, so we are all too aware of the challenges and pressures that they are feeling,” he said.
“There is now a new Prime Minister in Number 10 and a Labour government in power. In truth, there is little in the way of detail about what Labour is proposing when it comes to our sector,” he added.
“There is a vague commitment to review business rates but in reality, we have heard all of this before and I don’t hold out much hope that this will lead to an overhaul of that system any time soon, despite it being much needed.
“What is clear is that increases in the National Living Wage will almost certainly continue to be inflation-busting and this will put even greater pressure on a very beleaguered UK hospitality sector.” 
He said in an environment where getting the balance right between reflecting significant cost pressures – specifically the cost of labour – in pricing, while UK consumer confidence still felt quite variable, would prove extremely challenging for some operators.
“As a big and growing business, I am confident that we can continue to get the balance right, not least because other inflationary pressures have eased,” he said.
“However, there is only so much more small independent hospitality businesses can take and I fear that the sector will continue to see the number of outlets in the UK reduce.”
Loungers, which now employs nearly 9,000 people across its 257 sites, would continue to do everything that it could, and would work with industry body UKHospitality to ensure that the voice of the sector was heard by government.
“More specifically, I will continue to make no apology for expressing the opinion that if there is any help at all forthcoming for hospitality it should be targeted towards small businesses in our sector, rather than the big corporates,” he added.
During the 53 weeks to 21 April, the group achieved record revenue of £353.5m, up 24.7% on the prior year and a 22.2% increase when excluding the 53rd week.
The group opened a record 36 new sites during the year, seven more than in the previous year as well as achieving industry-leading like-for-like sales growth of 7.5%, with current trading continuing to beat the market.
At year-end Loungers’ portfolio totalled 257 outlets – a figure it is confident of growing in the long term to 600-plus.
Following the opening of its latest Lounge in Ely, Cambridgeshire, its estate is now made up of 220 Lounges nationwide, based roughly on the same concept as its first venue on North Street in Bedminster, which opened nearly 22 years ago offering a relaxed atmosphere with a strong food offering and quirky décor.
This template has worked particularly well on suburban high streets and smaller town centres where rents are often lower and competition is mainly from coffee shops or traditional pubs.
The group also has 35 Cosy Clubs, which tend to be based in larger, city and town-centre buildings, pictured above, and three Brightside roadside restaurants, all in the South West.
