Adrian Forte, owner of The Duck, a bar and restaurant in Bournemouth, describes the current circumstances in which his venue has to operate as unprecedented.
“I’ve been in the business for 40 years, and I’ve never seen such a perfect storm,” he says. “First Brexit, causing all these staff shortages, then Covid, and now the cost of living crisis. We feel like we are being squeezed on all sides.”
Up and down the country, restaurants, pubs and hotels have been driven to the brink: more than a third of UK hospitality businesses said in October last year they could go bust within months amid surging energy bills and declining bookings.
Nine months later, the venues that have survived the winter are battling inflation, a staffing crisis, patchy customer demand and soaring interest rates that have had knock-on effects on various parts of the industry.
“We were looking at opening a second site, but that’s been put on ice,” Forte says. “The end of freedom of movement has really stuffed the industry.
“We struggle to find one new chef when one leaves, we couldn’t face trying to find five new chefs for a new bar. We’ve had to put wages up by 10%, to retain staff. Our energy costs have doubled, food costs in general are up about 20%, beer prices have gone through the roof. In March they rose by 20% and our supplier just said there’s another rise in the pipeline.
“We’ve introduced £6-for-a-pint with that rise, and you’re asking yourself whether you can charge £7 for a pint of beer – perhaps you can do that in London, but not so much down here.”
Because chefs in particular are “almost impossible to find”, as Forte insists, the venue has stopped doing roasts and is no longer opening for breakfast.
“We’ve cut our opening hours, and we have had to put our prices up, but you can’t pass all of these extra costs on to your customers, if you don’t want to lose them. Our target at the moment is to break even.”
Forte’s complaints are echoed by 51-year-old Lee, who runs a restaurant in Pluckley, Kent.
“We’ve been adapting to the cost of living crisis with huge difficulty,” he says. “It’s just everything.
“In over 30 years I’ve not known it to be this difficult. It’s very, very challenging, and our sales just don’t make up for our outgoings any more.”
Despite the restaurant’s regulars being overall rather affluent, Lee says, demand fell off a cliff in April.
“In the first three months of the year we experienced a marked uptick in sales that was very unusual for that time of year, we’ve never seen anything like it. But from the Easter weekend, the drop off in our turnover has been huge. It was like somebody turned off the tap.”
Compared with this time last year, sales are down about 30%, Lee says.
“There’s no sign of recovery, and wholesale prices are still rising.”
He suspects that rising interest rates have been dramatically restricting his customers’ spending budgets.
“The cost of living crisis seems to now bite even our high-income customers. But there is also a limit to what you can do with a small workforce. I’ve now taken over the head chef position, to make some savings. Our previous head chef was on £50k.”
Despite such cost-saving measures the restaurant is finding itself in an increasingly desperate fight for survival.
“We’ve been losing money for the past three months. We’ve had to call an emergency meeting with the landlord, as we just can’t see a way forward. It just isn’t feasible with the way the economy is going. If it does carry on like this, we’ll just become another statistic.”
Niko*, assistant general manager at a popular neighbourhood restaurant in Glasgow, says narrowing profit margins and customers with tighter purse strings are having a big impact on the wellbeing and finances of hospitality workers.
“A huge part of the industry survives on tips and although people still seem to be going out, tips have been hit hard by the higher cost of living,” the 30-year-old says. “Tips used to be about £4 an hour per person, now you get perhaps £2 an hour.
“Everything is more expensive, which has been affecting the way we operate. Last year we ordered what we needed and more to make sure that we did not run out of anything, but now there is a huge amount of pressure to not overspend, meaning we now place smaller orders twice a week, to avoid having any excess stock sitting around.”
The new approach involves logging daily updates on stock levels, Niko says, and after a busy evening, the restaurant frequently runs out of a number of items on the menu.
Managers are also urged, he says, to generate savings on wages by sending staff home as soon as trade slows down for a few hours.
“This is incredibly difficult to get right because, although bookings may suggest it’ll be quiet, it can get very busy very quickly, which that puts strain on the staff, who are losing hours while being worked extremely hard. At the beginning of the week, staff may be on the rota with 40 hours, but they’re not going to get those 40 hours, they may be just getting 30.
“I think everyone’s mental health and mood are at an all time low. All this is causing huge swathes of the industry to look at ways to get out, which removes experienced and talented people from an industry that has always had issues with retaining talent. It’s an extremely difficult time, and the gap between the owners and the people that work for them is only getting bigger.”
*Name has been changed
