BY JEROME HUGHES
FOOD-led businesses in Donegal are not surprised by the findings of a new report which details the cost to the economy of restaurant and café closures.
The Restaurants Association of Ireland study shows the demise of 212 food-led businesses across the country so far this year could result in the economy losing up to €288m annually.
The analysis takes into account social welfare payments to those who lost their jobs, reduced payroll taxes to the Exchequer and the loss of VAT receipts, commercial rates, and water charge receipts.
Enda Nicholls, of Arena 7 and the Brewery Bar and Restaurant in Letterkenny, says the government must return to a 9 per cent VAT rate if restaurants and food businesses are to survive.
“There are those in our industry who are hanging on by the skin of their teeth, hoping and praying that the government will bring forward proper support in October’s Budget. Zero was announced last year to help,” claims Mr Nicholls.
“We have a good business because we’re blessed with local support but there’s no doubt that many are really struggling. Our industry is very labour-intensive so the biggest challenge is wages,” he added.
Mr Nicholls says payments to his staff have increased by 8 per cent in the last 12 months.
The minimum wage was €11.30 per hour but is now €12.70.
“For every euro we bring in, one-third goes out in wages. When we turnover €10,000, from that €3,000 is deducted to pay staff, who are brilliant,” he explained.
“That’s our business model. It’s not like that for the big supermarkets.”
The Letterkenny businessman has been running Arena 7 Entertainment Complex for the past 20 years and the Brewery Bar & Restaurant for eight years. He says electricity prices have never been so high.
“It was 13 cent per unit and it’s now 26 cent. That’s a 100 per cent increase in the electricity bill in the last 18 months alone. Heating costs have increased too. Insurance prices are crazy because there’s no competition in the market.
“Suppliers are passing their costs onto us. We then have to move that burden onto customers but there’s only so much they will take before deciding not to come in. It’s very tricky,” expressed Mr Nicholls.
The government has indicated it will announce additional support measures for restaurants and cafés in October’s Budget.
That will come too late for many, according to the Restaurants Association of Ireland.
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