Last orders, sadly
‘Carnage’ as 280 restaurants and cafés close in six months
SOME 280 restaurants, cafés and gastropubs have closed down since last July, the Irish Mail on Sunday has learned.
And several food-serving businesses have closed for good this week alone, less than two weeks after the minimum wage went up by 12%, according to the Restaurants Association of Ireland (RAI).
That comes on top of the VAT rate for hospitality reverting to its preCovid rate of 13.5% last September, as well as higher supplier and running costs.
And industry chiefs fear a further tsunami of closures in May if the VAT debt warehousing scheme expires as planned.
RAI chief executive Adrian Cummins described the hospitality sector as ‘carnage’ and said he is being notified of a business or businesses closing down ‘every day’.
Mr Cummins told the MoS: ‘You’re going to see streets and villages devoid of hospitality outlets if this keeps going on.’
He said the average restaurant with a turnover of a million euro will have extra costs of €100,000 this year.
‘That’s broken down to around €37,000 from the VAT increase and about €40,000 in wage inflation. So that’s over two thirds of the extra costs in those two components.’
However, the hospitality advocate noted that it is food-serving businesses of ‘all shapes and sizes’ being hit, and ‘in every county in Ireland’.
‘It’s indiscriminate in terms of the type of businesses closing down.’
Mr Cummins said the Government has its ‘head in the sand with regard to the carnage that’s going on in the industry’.
The RAI has written to Taoiseach Leo Varadkar and Tánaiste Micheál Martin requesting an emergency meeting to call for intervention.
It is urging the Government to return the VAT rate for foodserving businesses to 9% – the rate it had been lowered to for three years to help businesses cope during and after the pandemic.
The RAI also wants the Government to extend the repayment period for warehoused tax debt to 10 years.
Also introduced during the pandemic, the debt warehousing scheme has allowed businesses to park money owed to Revenue at a special low interest rate.
But on May 1, businesses with warehoused tax debt will have to pay back at least 20% of what they owe and produce a repayment plan for the remainder.
Mr Cummins said closures will affect tourism because ‘you won’t be able to find a place to eat in certain villages and towns next year’.
And he warned communities will lose their ‘local social outlets’ if the closures continue.
Popular Cork restaurant Nash 19 closed its doors this week citing soaring business costs. This came after one of the city’s first Chinese restaurants, Tung Sing, shuttered last week, blaming rising costs after 60 years in business.
The Corner House Bistro in Athlone, Co. Westmeath – described by Mr Cummins as a ‘long-standing, solid business’ – closed its doors for the last time yesterday.
The restaurant’s owners, Linda and Joe Connolly, wrote on Facebook: ‘The increased VAT rate along with all of the other costs including labour, food and energy have made our business no longer viable.’
The popular Storyboard cafe in
Dublin’s Islandbridge also announced its closure this week.
‘Chiefs fear a further tsunami of closures’
‘You won’t be able to find a place to eat’