Almost 50 food-led businesses closed in November
Is it getting even harder to run a food business in Ireland?
A total of 48 restaurants, cafés and other food-led business across the country ceased trading in November, as the food services industry continues to grapple with what is being described by the Restaurants Association of Ireland (RAI) as a “perfect storm of increased costs and reduced consumer demand”.
Operational costs for small, local restaurants, cafés and food-serving pubs - which include food costs, energy costs, insurance costs and VAT, the rate of which rose from 9% to 13.5% in September - have risen, while a recent Bord Bia report found consumers are eating out less often.
The announcement of the 48 closures was made as part of the RAI’s Monthly Closures List that it publishes each month. The RAI will continue its Monthly Closures List over the coming months.
The Restaurants Association previously announced that 140 food-led hospitality businesses had ceased trading between July and the end of October of this year.
CEO of the Restaurants Association of Ireland, Adrian Cummins, said: “What we are being told by restaurant and café owners is that this year’s busy Christmas season will not be enough to keep the doors of many food-led businesses open through 2024.
“As a result of various measures included in Budget 2024 ranging from the 12.4% increase in the minimum wage to the increase in paid sick leave entitlement days and the introduction of a pension auto-enrolment system, costs are only going to rise next year.
“The increased cost of business scheme which was announced by the Government as part of the Budget will prove insufficient for many restaurants and cafés struggling to stay viable in the coming months.
“Our members say that the amount they expect to be eligible for as part of the scheme will only cover a fraction of the cost increases they will see next year,” he said.
“Thousands of jobs and hundreds of businesses are at stake. If large multinationals in Ireland were grappling with the current crisis affecting restaurants, cafés and gastropubs across the country, a task force would be established in the morning,” he added this week.
“The Government needs to seriously consider introducing a hospitality-specific support package and also returning the 9% VAT rate for food-led businesses.
“If the Government fails to take swift and decisive action - including the return of the 9% VAT rate for food-led businesses - then the alarming level of closures we are already witnessing will only be the tip of the iceberg.”
Paul Lenehan, President of the Restaurants Association of Ireland, added: “This time of year, restaurateurs, publicans and café owners are normally full of positivity and there is a sense of excitement in the air, but this year it is the complete opposite.
“I’m over 20 years in business and employ 155 people across four locations. Things have never been as hard as they are now. The VAT rate remains the biggest issue - the increase to 13.5% is like an assassin, it will pick us all off, one by one, unless something changes quickly.”