Top chef says rising costs are eating into profits in the food business
MICHELIN-STARRED chef JP McMahon has warned that more restaurants will be forced to close in the near future due to soaring costs.
The 43-year-old, of Aniar and Cava Bodega restaurants in Galway, said: ‘Over the last four months or so everything has gone up. Butter doubled, oil got more expensive, flour got more expensive, coffee, beef...
‘So, we’re on a bit of a wing and a prayer. We have tried to increase the menu where possible but it’s not possible to keep up with inflation or price rises,’ he said.
‘You just hope the summer will be good and that we’ll get through it, that’s what we’re trying to do at the moment.’
A lot of the price increases are down to soaring energy costs, he said.
‘Food has to be transported. We would deal with a lot of Irish producers whose prices have gone up who are indirectly affected by the war in Ukraine. It’s a knock-on effect at a global level. It’s very difficult, inflation is at 7%.
‘Also the cost of labour has gone up since Covid because there are fewer people to work, so it is a balancing act.
‘I do think you will see more places close. A lot will hold out for the summer and will see how things are but tourism is down as well compared to 2019. There isn’t enough to go around. We lost a few days in the last couple of weeks because of chefs out with Covid.
‘But you just keep going and hope that summer will be good and there’ll be a lot of domestic tourism but I imagine a lot of people will be flying away this year,’ he said.
Asked about the mood in the industry, he said: ‘Fear might be a strong word but certainly there is anxiety in terms of how to balance the books because if everything else is going up and you can’t match your prices.’
Energy costs in his businesses have trebled with his annual bill soaring from around €25,000 to €75,000.
He confirmed: ‘The unit price has trebled. That is what we’re looking at, so we have to find another €50,000 and if that comes out of the profits, say we make €100,000 profit, it’s €50,000 less to play with to do whatever in terms of equipment or reinvestment. I’ll be happy if we break even. My main aim is just to stay afloat. The last few years have been difficult but this year is certainly going to be as difficult as the last two.’