The Restaurants Association of Ireland (RAI) expects a wave of food business closures to continue in the coming months, with over 280 closures in the last six months of 2023.
The RAI blames high running costs and the increase in the VAT rate for the closures and is appealing to the government for support.
The RAI has published a five-point plan to “save” restaurants and food-led businesses, including reinstating the 9pc VAT rate and providing support for energy costs and wage increases. Business consultants to the hospitality industry Price Waterhouse Cooper have said more than 700 businesses became insolvent in 2023.
Chief executive of the RAI, Adrian Cummins, said “over the last six months we have seen 280 restaurants and hospitality food-led businesses close down. We are facing a crisis in our industry at the moment in terms of closures, and we’re seeking immediate action from the Government to intervene in terms of saving our industry and saving restaurants and coffee shops across the country,”
“Closures are being caused by a number of factors. The increase in the VAT rate from 9pc to 13.5pc has rocked our industry to the core. Wage inflation is a factor in the closures and also the warehoused tax that’s due to the State over the next number of months, plus supplier cost increases.
“We feel we are going to see hundreds if not thousands of businesses close across the state in the next 12 months, if the Government don’t intervene and provide a rescue package for our industry as soon as they can,”
Nicola Lynch ran Zest Cafe in Killorglin in County Kerry for 18 years, before she closed the doors for the final time a fortnight before Christmas. Her business was the fourth restaurant/cafe to close in Killorglin in the last four months of 2023, after Leaf and Larder, Selina’s Cafe K and Emile’s.
Ms Lynch said the costs of running her business – which included an electricity bill for more than €34,000 – became unsustainable.
“You feel like, after 18 years you close the door and you feel like you’ve failed. It wasn’t until the community here in Killorglin came in and showed such love and compassion to me and all the girls who worked with me for years that you realised you didn’t actually fail, it was just the system that failed you.“
