The till looks better than the bank balance
Anyone who’s run a pub knows the feeling. Friday was rammed, the till roll is long, and yet the account looks no healthier at the end of the month.
The figures back that up. The Morning Advertiser’s own price survey found the average pint of draught beer rose 17p in a year to £5.34, a rise of 3.3%. Spend per head is up too. The Oxford Partnership and Vianet’s Market Watch for September put average spend per head at £26.97, up 3.5% on the year, with occupancy and dwell time also higher.
That sounds healthy until you set it against inflation. The government’s own Budget papers note that annual charges for one tax are rising 3.5% “in line with the September 2026 CPI”. In other words, the extra spend per head has only just kept pace with prices in general. It hasn’t left room for costs that are rising faster.
Where the money is going
The clearest recent picture comes from a survey run in October by CGA by NIQ for UKHospitality, the BBPA, the British Institute of Innkeeping and Hospitality Ulster, covering operators of more than 9,000 sites. It found:
- Energy: 74% saw their electricity bills go up in the last three months, 65% saw gas rise and 61% saw heating oil rise.
- Food and drink: looking at the non-tax challenges for the next 12 months, 88% named food and drink cost inflation as their biggest concern.
- Energy again: 80% named energy prices, a close second.
- Investment: 80% said the current business environment is stifling new investment.
The trade bodies’ joint statement put it simply: “strong sales are not the same as healthy profits.”
Then there’s tax and wages. The BII says only one in four pubs is making a profit in 2026, and that over 40p in every pound spent in pubs goes to the government in tax. The BBPA’s version is that one pound in every three spent in a pub goes straight to the taxman. Those are trade body estimates rather than official statistics, but they point the same way.
And more is on the way
Three cost rises are already confirmed for early 2027:
- Beer duty on beer of 3.5% to 8.4% ABV rises from £22.58 to £23.61 per litre of alcohol on 1 February 2027, with the draught rate going from £19.45 to £20.34.
- The National Living Wage goes from £12.71 to £13.21 an hour on 1 April 2027. The BII reckons that adds about £1,000 for every full-time member of staff.
- The Soft Drinks Industry Levy standard rate rises from £2.08 to £2.25 per 10 litres on the same date.
Against that, pubs in England get more business rates relief from April 2027 (covered in our rates piece in this series). VAT stays at 20%.
So are publicans making less?
Nobody publishes a single national figure for what the average licensee takes home, so we won’t pretend there is one. What the evidence does show is this: prices and spend per head are rising at about the rate of inflation, while energy, food and drink, wages and duty are all rising too, and the tax take on each pound is already heavy. For a lot of pubs, that adds up to more work for the same money, or less.
Five places to look in your own numbers
None of this is new to anyone behind a bar. But it’s worth going back to basics before the February and April rises land.
- Gross profit by category, not overall. Work out your margin on draught, packaged, spirits, soft drinks and food separately. An overall figure can hide a category that’s quietly gone backwards since your last price change.
- Your energy contract. Know exactly when it ends and what you’re paying per unit. With most operators seeing bills rise, renewal is not the time to find out.
- Wages as a share of sales, by session. Look at it shift by shift, not week by week. A quiet Monday lunch staffed like a Saturday is where margin goes.
- Supplier prices against invoices. Price creep on food and dry goods is easy to miss when you’re busy. Check a handful of lines against last quarter.
- Plan your price changes. Duty rises on 1 February and wages on 1 April. Decide now what moves, by how much and when, rather than reacting after the costs hit.
The bottom line
Busy isn’t the same as profitable, and the trade bodies have the survey data to prove it. Strong summer trading didn’t fix margins, and 2027 brings fresh cost rises. The pubs that come through best will be the ones that know their numbers category by category and act before the costs arrive, not after.
Sources (7)
- Average pint price rises 3.3% to £5.34, The Morning Advertiser finds, The Morning Advertiser, 21 May 2026
- Pubs return to growth in September, BII, on the Oxford Partnership and Vianet Market Watch, 16 Oct 2026
- Budget 2026, Annex A: rates and allowances, GOV.UK, 28 Oct 2026
- Soaring costs holding back investment, new member survey reveals, UKHospitality, Oct 2026
- BII members disappointed as budget fails to deliver, BII, 28 Oct 2026
- Britain set to lose one pub a day in 2026 at the expense of over 5,000 jobs, BBPA, 12 Oct 2026
- National Minimum Wage and National Living Wage rates, GOV.UK