“I Barely Slept After My Energy Bill Came: Restaurants Face Cost of Living Crisis”
Friday night dinner service is underway and Mike Ryan is busy in his Limerick kitchen cutting and preparing meat. His Cornstore restaurant is well known for its steaks, he said. Beef tenderloin is back on the menu.
One of the challenges is trying to make sure it’s still appealing to people to come. Good meat has become very expensive and there is a balance between making a margin to keep the doors open and, excuse the pun, what customers can swallow,” Ryan said.
Mr Ryan is the manager and executive chef of four restaurants in Limerick and Cork – there is a Cornstore and Coqbull branch in each town.
His complaints are the same as those of many in the sector: the energy bills are exorbitant. Mr Ryan estimates that his gas and electricity costs will still be up 200% by the same time next year. Food costs are on the rise.
CSO Consumer Price Index data released last week shows food inflation for the year to September was around 10%. Flours and cereals increased by 16.5%, meat by more than 12%.
Paul Kelly, director of industry group Food Drink Ireland, said some food prices have fallen in recent months, but high costs for energy, transport and inputs – such as fertilizer and seeds for the farmers – means the gains have been wiped out.
“There are no signs of it slowing down, unfortunately,” he said. “The average [cost] for 2023 is going to be even higher, and this indicates that we are going to see a new wave of food inflation at the retail and restaurant level.
Suppliers also face competition from the UK, where energy price caps give companies cost certainty. He said this could allow them to reduce prices for Irish exporters. Targeted support may be needed to help these businesses manage energy costs, he added.
In Leitrim, John Kelly recently received an energy bill that left him stunned. He then spent a sleepless night.
This time last year, the bill at the Riverbank Restaurant near Dromahair was €4,200 for two months. Now it has almost tripled – €12,500.
“Even from 2009 to 2011, in the depths of the recession, I never thought I would have to close the restaurant. It’s the only time we look at the money that’s going out and what’s coming in and we’re like, ‘Are we able to keep the restaurant open?’” he said.
Mr. Kelly is not talking about a permanent closure but about a reduction in opening hours to bring down energy costs.
“The bar is downstairs with bar food. The restaurant is upstairs. We have always opened the restaurant from Thursday to Sunday.
“Now we’re looking at cutting it down to Sunday lunch unless there’s a big party going on that’s worth opening up, heating it up, turning on the lights and opening up an extra party. of the kitchen that works when the restaurant is open.”
He has put a lot of time and effort into training qualified staff, but fears it will be difficult to retain them.
Between opening in 2009 and closing for the pandemic, it adjusted its prices twice.
The restaurant reopened in June last year after the pandemic. Menu prices were adjusted three more times due to increased business costs – before the energy bill of €12,500.
“Every five or six months, or even once a year in some cases, you might get a letter saying a box of crisps is going up, or something. But [lately] it was every two or three weeks that you received letters from suppliers.
“Your heart may not sink, but you won’t sleep well that night. The night I received the electricity bill, I barely slept a blink of an eye.
“I can’t go back to my client anymore, because I won’t have any more clients.”
If I was advising someone I would say watch numbers and margins like a hawk
Heading to Co Kildare, Paul Lenehan, who owns both Harte’s and Firecastle in Kildare town, and the Dew Drop Inn in Kill, said an adjustment to opening hours had helped him manage costs .
Firecastle is still open seven days, but after Covid Harte’s and the Dew Drop Inn reopened five days a week to manage a staff shortage. “Mondays and Tuesdays have always been very difficult,” Mr Lenehan said. “Sometimes it makes business sense not to be open all the time. Once you take that plunge to close and see the benefits immediately, you see it makes sense.
Gareth ‘Gaz’ Smith of Michael’s in Mount Merrion, Co Dublin, said his restaurant was doing well but the sector needed better representation.
“It is a travesty that there is no specific minister for hospitality,” he said. “If you were to calculate the number of people affected if things go wrong, that would deserve greater representation.”
He estimates that 250,000 people work in the sector. Another 150,000 probably depend on it for their income.
“No one will beat for us as hard or as strong as [a minister] could for us,” Mr. Smith said. “It would also provide better orientation.
“If I were to advise anyone right now, it would be to watch numbers and margins like a hawk. The next six months will have to be managed like a chess game in terms of rising costs.
Many restaurateurs are worried about bills due next year. Some are only surviving because state support during the pandemic has enabled them to reduce VAT and warehouse tax debts.
But VAT is expected to rise from 9% to 13.5% in the new year and stored taxes will also be due. Some believe that extending the two programs until next summer will buy companies time.
John Kelly is reluctant to ask for more support, but said costs need to come down. He welcomed the Temporary Business Energy Support Scheme (TBESS), covering up to 40% of rising electricity or gas bills of up to €10,000 per month for eligible businesses, but wonders if this will help everyone.
“This increase in electricity is unsustainable. I know they will cover 40% of the difference, but is that enough to keep people running their own businesses? Is that enough for people to say I’m better off where I am than unemployed? “, did he declare. “I love my job but it’s very difficult to love doing something when you’re under pressure.”
Back in Limerick, Mike Ryan talks about how the housing crisis is linked to all of this.
Some of its staff have left Ireland and returned home to winterize the pandemic with their families. They wanted to get back to work when it was clear the hospitality industry was going to stay open, but they couldn’t find accommodation. He is barely finishing his point when there is a cheer in the background.
“I’m standing here and the restaurant is after dark. We must be after blowing a fuse. I better settle this.
We say goodbye so he can turn the lights back on. It’s a temporary problem, part of running any business, but many restaurants fear that this darkness will descend on them permanently.