Four in five restaurants will look to increase prices over the coming year to mitigate against rising costs as the fear of closures loom large over the sector, a new survey has found.
The survey, conducted by risk advisory firm Kroll in conjunction with the Restaurants Association of Ireland (RAI), has found that 67% of restaurants fear that they will close in the next 12 months as a result of inflation and staffing pressures.
In total, 133 business owners participated in the survey — 85% of which were standalone businesses and 15% were part of a chain.
One of the biggest challenges facing restaurants this year is their energy bills with 33% of businesses reporting their bills increased by 100% in the last six months. A further 24% said it increased by 75% and 31% said it increased by 50%.
As a result of the rising costs, 80% said they will increase the price of their products or services.
Among the biggest consequences of the rising energy costs is the reduction of operating hours which was reported by 45% of businesses. In addition, 36% said they will have to reduce their headcount, 30% said they will reduce menu options.
Adrian Cummins, chief executive of the RAI, said government support “will need to be an important feature” for the businesses to survey in the coming year.
Rising staffing costs were cited as a major issue by 51% of businesses as they report a challenging labour market with 84% of all those surveyed expecting to increase staff wages in order to retain employees.
A strong majority of businesses, 79%, indicated that it would be a challenge to recruit and retain staff this year with 49% suggesting they will be increasing staff at all this year.
Declan Taite, managing director in Kroll’s Restructuring Advisory practice, said the “vast majority” of those surveyed indicated that “closure is a real concern for them”.
“It is perhaps not surprising but nonetheless interesting that participants reported the government supports — reduced VAT and tax warehousing — were crucial over the past year, without which they might have closed,” he said.
“With so much uncertainty for many at this time, it will be important for businesses to plan accordingly.”