Trading is toughest in 30 years' Rising costs blight hospitality sector's summer

On a sunny weekday in Norfolk, the lunchtime rush is getting under way at the White Horse in Brancaster Staithe.

- Joanna Partridge

On the terrace overlooking the coast, families and holidaymakers are tucking into local lobsters, plates of crab, and fish and chips.

"This is our Christmas," says James Nye, the managing director of Anglian Country Inns, the hospitality business started by his father, Cliff, 30 years ago - which owns the White Horse and nine other venues across Norfolk and Hertfordshire - stressing the importance of the summer season.

"We've had a strong start, with three months of sunshine," he adds. "But I think that has masked the challenges the sector is facing. When the rain comes you can see how overheads have gone up."

Nye reels off a list of costs facing the White Horse that will resonate with pubs, cafes, restaurants and hotels across the UK.

"Since April we have had a lot of increase in overheads, pretty much across the board. We've got food price inflation, the big one is labour, with the [employer national insurance contributions] NICs and national minimum wage, and everything is getting more expensive," he says.

Like many other businesses, Nye says he has been unable to absorb all the extra costs and has passed some on to customers. But he and others are aware they have to tread a fine line when households are watching their spending.

Brian and Ann Hart, visiting from Suffolk, are enjoying a drink while waiting to check into their room at the White Horse. They have found accommodation and meals in north Norfolk "definitely more expensive" than during their last visit, says Brian.

"We would still come away, but maybe only a couple of times a year now because of the cost," adds Ann.

Tax rises and extra employment costs from last October's budget came into force in April, raising NICS and lowering the threshold at which contributions are due. The minimum wage was also raised by 6.7% to £12.21 an hour.