Customers are spending less because of a cost-of-living crisis while operational costs rise, including higher rents, energy prices, a 20% VAT rate, and increases to National Living Wage and National Insurance. Historic net-profit targets around 20% have collapsed; achieving 10% is now rare and many operators make roughly 5% or break even. UKHospitality reports one third of hospitality businesses operate at a loss, driving closures across the sector. Restaurateurs across standalone sites and residencies report the real costs behind celebrated dishes and call for policy change via the #TaxedOut campaign.
"With a customer base that's spending less in the face of a cost-of-living crisis and rising operational costs (including higher rents and energy prices, a VAT rate of 20%, and increases in National Living Wage and National Insurance contributions), restaurant owners are watching profit margins get thinner and thinner. Richard H. Turner of Bodean's broke it down like this: "25 years ago, you would be trying to hit a 20% net profit."
"Now, if you can hit 10% you're a restaurant guru. You're gifted. Most are sort of making 5% net profit. Many are breaking even." According to UKHospitality, a third of hospitality businesses are operating at a loss, so it's no surprise that so many are being forced to close their doors. We spoke to a range of restaurateurs, from chefs with their own bricks-and-mortar sites to those running residencies inside other venues, and they revealed the real costs behind some of the city's most celebrated plates."
Read at London On The Inside
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