Supermac’s Managing Director, Pat McDonagh has called on the Government to reintroduce the 9pc VAT rate for the hospitality sector in Budget 2025.
McDonagh stated that the future of many small businesses in the industry depends on decisions made by the Government, which will have long term repercussions for the country.
The hospitality industry is struggling with increased operating costs due to changes in employment law, including minimum wage increases and higher energy bills.
The RAI reported that 270 restaurant and food-led businesses have closed this year, with a typical food business seeing total costs increase by €97,000, mainly due to the increased VAT rate to 13.5pc and wage inflation.
Pat McDonagh said: “in the face of rising costs, if you add up all the additional costs, margins are down 12-15pc. What do you do to control that? You either cut back on labour or put-up prices. But you can’t put up prices to cover all your costs or you will become uncompetitive.”
