"more than 200 restaurants and cafes have shut this year"

Brendan Burgess

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More than 200 restaurants and cafes have shut this year, RAI report finds

Employment in the sector overall grew by more than 80 per cent between the first quarter of 2012 and the end of last year
www.irishtimes.com

I think it's very tough at the moment on restaurants and cafés. Costs have gone up. In particular, the minimum wage has gone up to a very high level. But despite the high level of wages, they can't get staff.

I see lots of new coffee shops in Dublin. So I wonder if it's a net 200 have closed or 200 have closed but 200 more have opened up?

There was a woman on the radio this morning who had shut her café in Killorglin (I think). She said that 4 cafés in Killorglin had closed and now there was none left. Sounds odd that a town the size of Killorglin wouldn't sustain a café.

Brendan
 
This nonsense from the RAI does not help their cause.

A restaurant closing in Ireland can cost the Exchequer up to €1.36 million and on average involves the loss of 22 direct jobs, a new report commissioned by the Restaurants Association of Ireland to be published on Tuesday suggests.

It was obvious even to the Morning Ireland presenter that the 22 people who lose their jobs would get other ones very soon afterwards as the report talks about the difficulty in getting staff.

Brendan
 

She was all over the media about this a few months ago. It's genuinely a very sad story - and it was a fantastic café.



Kerry café owner forced to close her doors – ‘I’m devastated but I am done fighting’

When Nicola Lynch opened her café in Killorglin it was a dream come true. Now, 18 years later, that dream lies in tatters as she was forced to close her doors last week for the final time.
www.independent.ie
 
That’s very sad alright. An electricity bill of €34,000 is crazy. The Government should do more in that situation.
 
I honestly don't know how small cafes and restaurants make money.

One near me recently closed put a sign up on the door specifically saying government costs made it impossible to stay open.
 
Part of the closure problem is also probably that people have started to cut back on the take away coffee act. Some people were constantly buying these take-aways and not looking at the expenditure side. It can also be nearly as cheap to get a lunch as it is to get a snack with maybe two coffee and food. I hear friends talking about prepping their lunches at week-ends and savings on take-away lunches.
 
Yes, it’s a perfect storm with a cost of living crisis affecting their customers and some of those higher costs hitting their businesses.

I do wonder about moral hazard and ‘zombie businesses’ damaging more solid businesses. For example, do those pop-up places have the necessary permissions and are they tax compliant? And are there businesses that will be bust when the Covid tax becomes payable damaging the long term viability of more sustainable businesses?
 
Gordon Gekko said:
That’s very sad alright. An electricity bill of €34,000 is crazy. The Government should do more in that situation.
Click to expand...
It's definitely crazy, but electricity/gas is a huge element of running a restaurant and every restaurant and cafe owner should watch every aspect of it and see what options there were.

Rates were very high from July 2022-jan 2023, but then started falling substantially and there were options for business customers to move suppliers.

Certainly for the last few months, rates are similar to 2021, so I no longer buy the "energy prices" angle.

Generally, restaurants and cafes have the highest failure rate of any type of business and I suspect that the number quoted is little different to numbers of closures in 2019 when there was no war and no COVID.

Jan 2020 https://www.irishtimes.com/life-and...many-irish-outlets-shutting-up-shop-1.4135048

Interesting looking at the RAI news pages, the "restaurants closing" statements only started when the current president took office.
 
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I see the same at work. Colleagues who always left the building for lunch are doing at least 2 days in now.

The ones who were better at bringing lunch are even better now and will have a stock of snacks like soup, noodles, packet of egg rice in the drawer.
 
It's a difficult situation for much of the hospitality sector, albeit restaurants and cafes seem to be getting hit particularly badly.

An unintended consequence of the increase in the minimum wage, was that staff on a higher wage often pressed for an increase, once those on the minimum wage got their uplift.

I find myself wondering how we can have employers complaining about the lack of staff, when I see people having travelled to Ireland from abroad, seeking asylum etc. who apear to have almost nothing, and might appreciate the opportunity to work, even if only part time, or on minimum wage. Then there's the live register, and those who "can't find work" - an issue that no Government seems willing to really tackle.

Rates are a serious problem, not least, because many business owners who I speak to, feel that they don't get value for the amount they are forced to pay.
 

Non specific statistics

Soaring costs behind sharp increase in Irish businesses closing in 2023

About 650 Irish firms are expected to shut this year, according to a PwC survey, far ahead of the 539 which folded in 2022
www.irishtimes.com
 


The fact that she had run a successful business for the previous 16 years suggests - to me at least - that she had been watching every aspect of it.

Is there an option for a business to switch electricity supplier in a situation where it owes a large sum to its present supplier?
 
The owner of my regular cafe said it's was their landlord (supermarket chain) that nearly put them under refusing to drop sky high rent even temporarily during lockdown and afterwards with all the spiralling costs of electricity food etc staff etc. I know about the wholesale cost of electricity but still there's too much lag in price drops.

I can't imagine it's minimum wage increases really being the main issue. I dunno how people survive on that. I do know some shops made shifts shorter so some staff never work long enough to need a break. Thus don't need paying for it.
 
I know it's harsh for those that are directly affected by closures but I can't help thinking that from a national perspective it's not good to have so many jobs and so much money tied up in coffee shops and cafés. It's not exactly adding value or creating wealth. With full employment and a labour shortage in so many wealth creating sectors of the economy maybe these closures are not such a bad thing.
 
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