Time is running out for Pascal Aussignac, chef patron of the Michelin-starred Club Gascon, as he counts down to the crucial Christmas party season.
“We are not full at the moment. We are obviously hoping that will increase. We have a few Christmas parties booked but it is down on previous years,” said the 55-year-old.
“I’ve still got a few tables on a Saturday in December available that should be fully booked. We have never had this before – for November and December it would be full in previous years.
“I think at the moment, due to the economic situation, people are waiting to see if they have enough money before they commit.”
Staffing issues forced Aussignac to close Comptoir Gascon, his French bistro near Smithfield Market in central London, and his workforce across his five remaining eateries has plummeted to 60 people from the 160 he employed prior to the pandemic. He is “very scared” that a lot of restaurants could collapse in the months after the Christmas.
Aussignac’s fears are echoed in cities, towns and villages across Britain – a pattern of closures that many fear is about to accelerate as recession, rent rises and squeezed household spending combine with fraying public transport and rail strikes.
Members surveyed by UKHospitality, the British Beer and Pub Association and British Institute of Innkeeping and Hospitality Ulster were anticipating a vacancy rate of 17% this Christmas, compared with the current vacancy rate of 11%. This means 33% will reduce venue opening hours and 29% will simplify their menus this Christmas.
Aussignac said there was “nothing” in chancellor Jeremy Hunt’s autumn statement to tackle the staffing crisis in the industry.
“I do not think there was anything in there that deals with the biggest issue hospitality is facing and which means we cannot keep places open or operate at full capacity,” he said.
Since January Aussignac has had a vacancy for a full-time pastry chef, but was only able to fill it in the past few weeks, a situation he has never experienced before. The lack of staffing, which he blames on people returning to Europe during lockdown and since Brexit, means Club Gascon no longer opens for lunch and only serves dinner.
“Brexit is the main reason we are having these staffing issues. Previously it was easy for Europeans to come here and work, but it isn’t any longer, so now they pick other cities like Paris or Madrid.”
More than a third of hospitality businesses are at risk of failure in early 2023 due to cost increases, the UKHospitality survey found. Figures from the Insolvency Service showed that the number of restaurants and food outlets across the UK entering liquidation has increased by 46% in the three months to September.
While Hunt’s autumn statement included a £13.6bn package to support business rates payers, industry experts were critical of the lack of focus on economic growth.
“It’s absolutely heartbreaking, we worked so hard and we have walked away with nothing to show for it after almost three years,” said Arwen Beaton, publican at The Digger’s Rest in east Devon after closing its doors for the last time. The thatched pub nestled in the picturesque village of Woodbury Salterton was taken over by Beaton, 48, and her partner Daniel Kelly, 42, in April 2020 at the start of the pandemic.
The couple offered free food delivery to vulnerable people and opened a shop selling essential items to locals, before reopening after lockdown.
“At the beginning of this year we were in a good place, we had somehow got through Covid and everything was looking positive and then we were hit with massive cost increases,” said Beaton.
Energy costs at the pub “tripled”, food prices went through the roof with key items such as cooking oil more than doubling and the pub operator which owns the premises increased the rent by 10%.
Beaton said that for the first time customers were “talking about their finances at the bar” and footfall began to decline as they went from seeing regulars once a week to less than once a month.
In August, The Digger’s Rest was 30% down on the previous year’s takings , forcing it to close its doors for good on 7 November.
Beaton said that three other pubs within a five-mile radius also shut up shop in recent weeks, adding that rural pubs in particular were “part of the community” and when they are gone “you will struggle to get them back”.
Emma McClarkin, the chief executive of the British Beer and Pub Association, said the industry remained on a “knife-edge” and it was “very disappointed” that a 12.5% rate of VAT was not implemented.
Kate Nicholls, the chief executive of UKHospitality, welcomed the business rates support but said the chancellor failed to outline “any plan for economic growth” and there is “nothing to give firms confidence, let alone invest”.
The problems facing hospitality have been described as the “five horsemen of the apocalypse” by James Chiavarini, owner of Il Portico, an Italian eatery that was opened and run by his family on Kensington High Street in London for 55 years.
He said soaring staff, supply, food and energy prices, the impact of the cost of living on his customers and despondency at the economic situation, had all affected the industry.
Chiavarini said this “economic headwind” forced him to close Il Portico’s sister restaurant Pino, also in Kensington, in June this year.
He added: “After lockdown ended people believed in this idea that everything would be like the roaring 20s and the economy would be flying, but this just hasn’t happened.”
Imogen Davis, the co-founder of Native, in Mayfair, west London, said that getting staff had always been tough but that “then Covid and Brexit happened and it became so much harder to recruit”, leading the business to drop plans to open an extra day.
Increased energy costs caused by Russia’s invasion of Ukraine are the biggest problem for Alex Greig, who owns Fuggles Beer Cafe, which has premises in the west Kent towns of Tonbridge and Tunbridge Wells.
The 37-year-old – who also owns a bottle shop in Tunbridge Wells – has seen a £10,000 increase in energy bills but warned that without the government discount the costs would have been £40,000 and made the businesses “unviable”.
Greig said the government’s announcement on business rates was “something” for the industry but called on the government to clarify exactly what energy support would be available for hospitality businesses next year.
“Our customers will have less money and our costs will be a lot higher. That’s why we need certainty to motivate us to want to invest in our businesses and encourage us to grow,” he added.
Greig said “slashing VAT” would be a “massive stimulus” for the industry and “give us the confidence so we can continue to invest”.
Kenny Atkinson, the owner of the Michelin-starred restaurant House of Tides and Solstice, both in Newcastle, said his energy bills had “tripled” and has struggled to get suitable staff, with seven current vacancies.
“There is no direction, no confidence from the government. We aren’t asking for handouts, but a reduction in VAT can help us grow our businesses,” he said.
A spokesperson for the Department for Business, Energy and Industrial Strategy said it had “provided an unprecedented package of support including VAT cuts, business rates holidays and government backed loans worth around £400bn”.
