A top restaurateur has warned there is “no light at the end of the tunnel” for hospitality businesses with figures showing more than a third are losing money.
In the last 12 months, there have been more closures than openings in Northern Ireland and venues are facing a combination of soaring energy bills and inflation.
Owners of Saga and Shed Jonny and Christina Taylor said the rising cost of that local produce, coupled with escalating labour costs, led to the closure of their previous restaurant Blank earlier this summer.
Speaking to the Irish News they described the situation as “a constant battle” for those working in the industry.
“It’s a vicious circle where people are looking to spend less to eat out, but business costs keep rising and there is no help or support,” said Christina.
“Even if we close during the quiet periods we still have to pay the utility costs, employees holiday pay, rates and much more so we cant win either way. There has been an ongoing call for a VAT reduction for the industry and a price cap for utilities but nothing has been delivered.”
With the industry supporting around 65,000 jobs here Christina highlighted the economic ramifications more closures could have.
“There will be no jobs to help the economy, no more independent restaurants to support the tourism industry and a loss in revenue through rates and VAT,” she warned.
Unlike in other parts of the UK, hospitality businesses in Northern Ireland are not benefitting from a 75% discount on business rates bills that is in place in England and a 40% discount in Wales.
Jonny said more needs to be done to bring our hospitality sector on equal footing with Ireland and the UK to give small independent businesses a fighting chance.
“In the south they are complaining about an increase of VAT from 9% to 13% - I would give my right arm to pay 13%.
“Meanwhile across the water are benefiting from a reduction on their rates bills of up to 75% but we didn’t see that money used to provide that same relief here.
“If had known what I know now around the state of the sector I don’t think I would have opened Blank. Since the pandemic the sector has been on a spiral and every month it’s getting more and more difficult to keep your head above water.
“Like many independent business owners it’s a passion for my work that keeps me in the industry despite the pressures, but passion doesn’t pay the bills.
“Our ministers get lunch expenses with a salary of £80,000. They hold meetings about meetings but still nothing materialises in terms of support for the sector.
“The sad reality is that for a lot of businesses support being in place a month from now will be a month too late. We need action not words and a photo opportunity.”
Colin Neill from Hospitality Ulster said that “increases in wages, utilities and food and beverage costs have had a huge impact on the industry’s profitability”.
“Food inflation is more than 25% and proprietors cannot pass on the costs so their profitability margins are squeezed.
“We had a wage rise for workers and another due next year which is an added cost in additional to the contributing factors such as utility costs, VAT and business rates.
“There is still a demand for what our hospitality sector offers, but with the cost of living customers are choosing cheaper alternatives for eating out or spending shorter periods of times in our bars and restaurants.”
