Restauranteurs are seeing a drop of 10 per cent in the number of people eating out, with diners spending up to a fifth less than they used to, an industry body has claimed. The Restaurants Association of Ireland annual conference heard claims that Ireland is the most expensive place in Europe to run a restaurant. The industry has called for Government intervention to reduce costs.
Association chief executive Adrian Cummins said: “Restaurants are facing challenging times ahead with the cost of doing business increasing on a weekly basis. We are calling on the Government to seriously address the issues that affect the restaurant sector. We are 24 per cent more costly than our nearest EU partner on food costs. We are the highest in Europe for excise duty and we’re the highest in Europe for VAT”.
Association chief executive Adrian Cummins said: “Restaurants are facing challenging times ahead with the cost of doing business increasing on a weekly basis. We are calling on the Government to seriously address the issues that affect the restaurant sector. We are 24 per cent more costly than our nearest EU partner on food costs. We are the highest in Europe for excise duty and we’re the highest in Europe for VAT”.
Mr Cummins called on Minister for Finance Brian Lenihan to address the issue of VAT in the forthcoming budget. “I would like to see VAT reduced by 3-4 per cent, that would create huge stimulus within the industry. It is important that we create a stimulus package. If we don’t, I would predict job losses in the restaurant industry towards the end of the year".
His calls were echoed by Terry McCoy, owner of the Redbank restaurant in Skerries, Co. Dublin. Mr McCoy said after 26 years in the trade, he was “very grateful” to be in business long enough to know what to do in the recession.
Mr McCoy has not yet had to put any of his 15 staff on a three- day week, however, he hoped the Government recognised how he was keeping people employed because “Ireland is very expensive to employ people”.
He hoped Mr Lenihan would introduce a cut in employers’ PRSI or “anything that will cut down the expenses of employing staff”.
Mr McCoy said his restaurant had seen a drop of customer spend of about €20 a head in the last year. “A year ago, people would have been spending around €60-€65 a head in the restaurant, now they are spending €45".
Although the number of customers in his restaurant had bucked the national trend and actually increased, the fact that they were spending less meant the real winner was the Government.
“We have increased the numbers of customers so our turnover is actually up, but the winner is the Government because it is extraordinary the amount of VAT they take".
Gina Murphy of Hugo’s Restaurant in Dublin and the WolfTrap Bar and Restaurant in Tullamore said parts of her business had seen a drop of more than 10 per cent.Although Hugo’s had largely remained unaffected, due to its excellent location on Merrion Road, staff hours in her Co Offaly restaurant had to be cut.
Ms Murphy said the restaurant was offering more choice and trying new menus in an attempt to lure customers back, but she admitted it was “a daily fight to keep people coming in the door”.
Association president Paul Cadden said a VAT reduction would have an immediate impact across the industry as it would give “an incentive to the Irish to holiday in Ireland during the summer and would make us more price-competitive on a European stage”.
He felt that restaurants would “trade their way out” of the current downturn so long as there were no hidden surprises in the budget.
