Return of the local
It’s cheers for smaller pubs as a shortage of taxis means punters are staying close to home
PUNTERS have been opting for the local pub over a trip into town thanks to a shortage of taxis, according to the head of the Vintners Federation of Ireland.
It comes as restaurants report a quieter Christmas than expected, ahead of a series of new Government-imposed cost increases expected to trigger more hospitality closures this year.
The CEO of the VFI (the association for pubs outside the greater Dublin area) Pat Crotty said the ‘broad strokes’ were that pubs did well over Christmas, particularly those in ‘smaller locales where they only have two or three pubs’.
Mr Crotty told the Irish Mail on Sunday: ‘An awful lot of places in small towns and villages did well, where you might heretofore ‘have had an exodus to the bigger towns and cities. They stayed put because of the shortage of taxis, as much as anything else.’
He said the taxi shortage was ‘identified specifically as the reason why [some VFI members] reckon they’re doing much better’.
‘People have made the choice to stay local instead of going to the next town. And as a result, the small publican says “Jaysus, I could get on to a couple of lads to play a few tunes now on Saturday”. And suddenly you’re creating a
‘A lot of people seemed to come home this year’
buzz in the place instead of standing there wringing your hands wondering if anyone will come in.’
VFI members also reported that ‘quite a lot of people seemed to come home this year’, Mr Crotty said.
‘Whether they’re doing well abroad or whatever, they all came home and so that in itself creates a magnet in small local areas. If Johnny, who’s in Australia, is home for Christmas, then I’ll come in to meet him one of the nights.’
And around 60% of VFI pubs are now offering food, Mr Crotty said, compared to less than a third ‘only a very short number of years ago’ – a trend accelerated by the pandemic.
The village’s gain may have been the town’s loss, with Restaurants Association of Ireland CEO Adrian Cummins describing a ‘patchy’ festive period for gastronomy.
Mr Cummins told the MoS: ‘There was a lot of hype around that there would be a big spend this Christmas. That’s not reflecting in what we saw in the tills, which is telling us that the consumer is being more cautious in terms of what they’re spending.’
He continued that habits in previous years of going out two or three nights over Christmas seemed to have been cut back to one night out for many people.
‘It depends on the demographics as well, but turnover wasn’t as good as what we thought it was going to be.’
Mr Crotty pointed out that pubs could be a more appealing option for those looking to throw a Christmas party on a budget.
‘The bigger restaurants and places people go to have parties, you need more of a corporate spend to really fill it out,’ he said.
‘But at pubs where you can either have a small party with a bit of finger food or you can just have a few friends in for a drink, it’s that much easier to organise and it’s much easier to fill a small pub.’
Mr Cummins said the special Covid VAT rate for hospitality of 9% going back to 13.5% in September is ‘really killing’ restaurants at the moment.
Another oncoming headache, he said, is the expiry of the Government’s tax debt warehousing scheme in May. Businesses had been able to park tax debt at a reduced rate of interest to mitigate against rising costs, but from May they will have to begin repaying the debt. By the end of October 2023, €280m was owed by 5,679 businesses in the restaurants and hospitality sector.
The minimum wage going up by 12% on January 1 will also have a major impact on hospitality, Mr Cummins said.
‘The combination of VAT going back to 13.5%, wages and supplier costs means a restaurant on a million euro turnover has an extra cost of €100,000 since January 1.
‘I think they made a dog’s dinner out of increasing the VAT rate. It’s going to make Ireland very, very expensive for tourism this year.’
He said the association is ‘predicting closures unless the Government intervenes with a bespoke package’.
‘This broad-based approach to supporting business just doesn’t work. They gave out €270m of support for businesses, but every business gets it. Those that are more profitable and making huge profits still get it, as opposed to the smaller businesses that might need more support.’