Closure on the menu as Asian eateries battle cost increases
RESTAURANT SECTOR SEEKS HELP TO DEAL WITH SOARING ENERGY AND GROCERY BILLS
SOUTH ASIAN restaurants and takeaways are at risk of going out of business due to rocketing energy bills, industry leaders have warned.
They are pleading with ministers to offer a significant financial package to help eateries cope with rising gas and electricity costs.
The latest energy price cap, announced in August, would have meant a rise of 80 per cent and resulted in a steep increase in household bills from next month.
Earlier this month. the government froze the cap to £2,500 from October for households. However, wholesale electricity and gas prices for businesses – except the energy sector – as well as for charities, hospitals and schools will be capped at half the expected cost on the open market, it added.
Ruhul Tarafder, who owns the London restaurant Masala Mix, and a takeaway, Jhal Chilli, in Kent, said the looming energy bills will be an “absolute disaster” for curry houses. He told Eastern Eye, “I am planning to close down my restaurant in London.
“I am not going to be able to afford the energy bills – the business is in its infancy, four months. It will be £400-500 a month; nearly the same as the rent.
“We are breaking even at the moment, and we are not going to be able to survive.
“I think so many places are going to close down. The government could do what they did during the pandemic with the Bounceback Loan.”
The chancellor, Kwasi Kwarteng, confirmed last Friday (23) that the government would not go ahead with a plan to increase corporation tax to 25 per cent, holding it instead at 19 per cent in a bid to spur economic growth.
Boshiur Rahman, who owns restaurant Monsoon Indian Cuisine in Dorset, said he will have to start turning off the lights and charging £25 for a curry after his energy bill rocketed 500 per cent to £2,250 a month.
Tarafder, who also runs a merchandising firm, said he believes most restaurants will be unable to increase their meal prices.
He said: “Do we start charging customers a fuel levy, who knows?
“Prices are already at the optimum in most restaurants. The price of cooking oil has gone up from £17 a tin to £45, rice and chicken has also gone up. The more you put up your prices, you get less orders, as everybody is feeling the pinch.
“People will probably decide to reduce opening hours. I know a restaurant in Ashford which is now open four days a week. It’s a problem to find staff happy with four days a week wages rather than six or seven days.”
The business owners were speaking prior to the government unveiling a package of support, including a cap, that will halve the unit price paid for energy from Saturday (1) to help companies, charities and public sector organisations, including schools, get through the winter.
One estimate puts the cost of the scheme at £25 billion. However, fears are growing in Westminster that the blanket nature of the bailout will see big businesses handed discounts they do not need.
Darren Jones, a Labour MP who chairs the business, energy and industrial strategy select committee, said: “Capping the price for all businesses is a waste of taxpayers’ money, which should be targeted at those which need it the most.
“Why should British taxpayers collectively get into even more debt to hand over public funds to Amazon?”
Meanwhile, a report by the Federation of Small Businesses found that 96 per cent of small firms have flagged concerns about energy bills. And nearly 40 per cent said they are paying more than double their costs while 45 per cent have had to raise prices.
Cyrus Todiwala, a leading chef who owns restaurants in London, admitted it is “finger-and-nail-biting time for us and the sheer threat of multiple closures across Britain as we enter one of the worst phases of energy prices.”
He told Eastern Eye: “Upon asking several restaurateurs, we have also learnt that just like us, no electricity company is offering their customers a chance of signing a contract and at the moment we are all under the greatest of price fluctuations. So we do not know how to react.
“Menu pricing is the easy solution for everyone, but it cannot be the most sustainable. Customers complain that prices in restaurant are high, because they feel other pressures at home and for food businesses. “It is a serious catch-22 situation. “Controls can come by being vigilant as well and trying hard to save wherever we can by shutting down all unnecessary usage, but in an industry that must keep going that is rather difficult.”
Todiwala added: “Britain needs to make investments in generating its own power to make it self sufficient within the next few years. Disruptions to small businesses from rail strikes and roads, to waste collection – all of these are so detrimental to our businesses. It’s a disastrous time and whereas the cheaper end of food places can raise their prices on a day-to-day basis, if need be, restaurants like ours could be forced to suffer and even close down as are hundreds of pubs and other places all across the country on a weekly basis.”
In September, family-run restaurant Al’s Tikka Grill in Bristol announced it will permanently close after almost 30 years, citing the cost of living crisis.
The restaurant’s team wrote on Facebook: “After great consideration, we made the difficult decision to permanently close our doors following the cost of living. The decision to close down our business after 30 years of serving you, getting to know you and making you part of our Als Tikka Grill family comes with a heavy heart.”
Syed Ahmed, editor of Curry Life magazine who runs food festivals around the world, said the problem comes amid ongoing staff shortages in the industry.
He said: “There is a huge staffing crisis, a lot of restaurants have part-time staff.
“Despite the energy price cap, restaurants don’t know how they are going to deal with the price of goods going up so much, the fear of competition.
“I visited Maidenhead in Berkshire recently and one restaurant is closed on Mondays due to staff issues, some of them are thinking of closing two days a week to save on staff costs.
“The help being offered is too little too late. It was delayed because of the [Conservative party] leadership battle.
“We have just come out of Covid. Some of them will go out of business because of energy and the price hikes.”
Shale Ahmed, who represents restaurant owners in Birmingham, estimates that around seven in 10 restaurants could be forced to close after seeing weekly shopping bills rise by 40 per cent. He said energy bills had also jumped from around £8,500 to almost £25,000.
He said: “The industry has faced and overcome many obstacles before, but this could be the starkest one yet. It is in a very dark place and if we’re not careful, it could fall off a cliff and leave thousands in the sector unemployed.
“The pandemic presented its own problems but the cost of living crisis has just spiralled things out of control.
“If we do not get immediate help from the governmentwe could face the loss of a iconic Birmingham institution – and the same further afield nationally.”