‘This is the tip of the iceberg’: Hospitality sounds alarm over restaurant closures

The closure of a raft of high-profile independent restaurants during the first week of the year has sounded the alarm over the difficulties facing small businesses.

 

MasterChef finalist Tony Rodd’s Copper & Ink in Blackheath, James Allcock’s the Pig & Whistle in Beverley, and Phil and Deb Lewis’ Kindle in Cardiff were among those to shut their doors in the face of rising costs.

 

Simon Rimmer’s Greens, the vegetarian restaurant he bought in Didsbury, Manchester in 1990, closed after 33 years of trading after facing a 35% hike in its rent.

 

In a video posted to X, Rimmer said the decision had been “heartbreaking” but said “the cost of raw materials, the cost of heat, light and power, employing people and general food costs has meant that the business unfortunately has become unviable.”

 

The closures have led to renewed calls to cut hospitality VAT from 20% to 10% and a petition on the issue started by restaurateur Andy Lennox has reached over 2,400 signatures.

 

Rodd told The Caterer his restaurant’s VAT bill was due to hit £120,000 while his energy bill had risen from under £30,000 in 2022 to £80,000 last year.

 

He said the business turned over around £21,000 a week but was only left with around £1800 after other costs to pay rent, business rates and energy bills.

 

“You can’t make it work, the numbers just don’t add up,” he said. “A lot of our [regular] guests said they wanted to come out, but their own mortgage and energy bills had gone up. The problem is the public don’t have that money to spend in restaurants.”

 

He added: “Unfortunately, I think this last week is just the tip of the iceberg. I’ve already heard of 20 restaurants that closed in the first five days [of the year]. I’m sure there are the same number again that have shut their doors quietly without any fanfare. It’s going to be a very strange landscape for a while and a tough time for a lot of people.”

 

Rodd said he had received over 3,000 messages since announcing Copper & Ink’s closure on 2 January, which he described as “difficult but also lovely”.

 

These have included former customers who had celebrated birthdays and engagements at the restaurant, as well as “a number of Labour MPs and councillors” interested to hear his experiences as a business leader.

 

“I’m worried the government is going to see how many restaurants close in the next month and still do nothing about it and assume the industry can just ride it out,” Rodd said.

 

“The government doesn’t understand how hospitality works as a business and the pressures we’re under. We need a minister for hospitality, someone that understands what we’re going through.”

 

Sacha Lord, night time economy adviser for Greater Manchester, said the closure of Greens showed how businesses were struggling “even in areas of relatively high disposable income”.

 

He called on both Labour and Conservative MPs to meet small business owners to understand “the realities they are facing”.

 

In a video on X, chef Gary Usher said: "Restaurants are closing in numbers now. I'm not an economist or politician. I don't know the ins and outs as I probably should, but it's literally staring us in the face at the minute that restaurants aren't fucking working, and we need help from the government."

 

When contacted by The Caterer about the recent closures and issues facing the industry, a government spokesperson said: “We recently extended measures to support pubs and hospitality, including offering a 75% discount on business rates up to £110,000 and providing tax relief for the sector worth nearly £2.4b.

 

“We have also frozen alcohol duty until August 2024 and through the Brexit Pubs Guarantee we remain committed to ensuring there will always be a lower duty rate for draught products.”

 

The government’s will set out its future tax and spending plans in the Spring Budget on 6 March.