Restaurant owner in Norfolk warns more venues will close this winter amid cost of living crisis
It's reported the number of restaurant companies going bankrupt has climbed by just over 45% in the last year
Last updated 31st Oct 2023
The owner of a restaurant to the south of Norwich is warning that more restaurants, bars and pubs will close this winter - if nothing is done.
It's as the number of hospitality companies going bankrupt has climbed by just over 45% in the last year - according to accounting group Mazars.
The total increased from 1,517 in 2021/22 to 2,214 in 2022/23.
"We are going to lose one way or the other"
Kevin Reynolds is the owner of Netherton Steakhouse in Long Stratton:
"Footfall in a lot of cases just isn't there. If we put prices up, it just wouldn't be realistic for the diners, so we are going to lose one way or the other.
"Help with electric and gas costs would be really helpful. They have really gone through the roof and it makes things a lot more difficult. We cook and heat the building with gas, but we use electricity for our fridges, which are on all day.
"We cannot recover this from the food we buy in"
"The thing that kills off any profit is the 20% VAT tax on food - as we cannot recover this from the food we buy in. Food we buy in is at 0% VAT, but we have to add 20% on to that, so pass it on to the customers."
He told us what they've been doing to try and improve footfall:
"For Wednesday's we do 'two burgers for £25' and on Thursdays we are doing '20% off food all day'. We have also introduced breakfasts from Thursday to Friday, just because our chefs are in."
"Combined pressures"
Paul Maloney is Associate director at Mazars:
"A lot of restaurants are beset with challenges well outside their control - many are struggling to keep their heads above water.
"The combined pressures of rising costs of staff, debt servicing and ingredients is shrinking margins and driving many businesses to breaking point.
"Restaurant insolvencies will continue until interest rates and inflation both come down substantially."
What has the Government said on this?
The Government says 'The Energy Bills Discount Scheme' is providing support to businesses- and tax changes will be unveiled in the Autumn statement.