Subscribe

Restaurant owner fears high energy costs are a recipe for disaster

/ 13th July 2022 /
BP Reporter

Restaurant owners are questioning how they will survive with energy costs continuing to rise and the bills forcing tough decisions.

Like many other businesses and households, their energy bills have suffered hike after hike in recent months.

Chef JP McMahon said his electricity bill at Cava Galway has jumped from €25,000 to €75,000 for the year, and could increase still further if there are any more price rises.

"How are restaurants going to deal with this? Trying to find an extra €50,000 for electricity is going to be a challenge," said Mr McMahon.

"No amount of price increase on the menu is possible to cover that and other increases.

In Association with

"Our unit price has trebled, and that's only the current estimate - it could go up again before the year ends."

Asked how he would manage, he said: "Fifty per cent of it is trying to make a plan in which you can put prices up on the menu, or cut back on things.

"The other fifty per cent is just hoping the Government will do something, because there is nothing we can do."

Mr McMahon said he needed the electricity for lighting, fridges and freezers, air conditioning and some ovens.

He admitted there would be some tough decisions to be made in the near future, as food ingredient prices are also continuing to get more expensive.

"Butter has now gone up by 66%, lots of staples like flour have gone up massively, and I fear this will mean the end for some places," he warned.

restaurant owner
energy costs
Adrian Cummins, chief executive of the Restaurants Association of Ireland (RAI) said: "Cost inflation is the single biggest issue, along with staff shortages, facing the industry."

He said that three to four smaller food businesses in Galway had already closed for good recently.

Adrian Cummins, chief executive of the Restaurants Association of Ireland (RAI) said: "Cost inflation is the single biggest issue, along with staff shortages, facing the industry.

"The RAI has put in a request for a meeting with the Government to discuss the issue in advance of the Budget, and we would hope they will do something to help the hospitality industry."

He said the RAI hoped that the Government would introduce a rebate or subsidy for energy prices, and maintain the lower VAT rate next year, as well as calling in the energy companies to explain the rises.

Among those to close already is popular Galway city falafel and vegetarian restaurant The Gourmet Offensive, which shut up shop late last month due to ongoing financial pressures.

Owner Floris Wagemakker said the decision to close "had to be made" and that he felt it was "out of their hands".

Speaking to Galway Bay FM, Mr Wagemakker pointed to inflation as one of the main reasons for the restaurant's closure.

"It's becoming impossible to provide the same products, the same quality,' he said.

Robert McElhinney, general manager of Dillon's Hotel in Letterkenny, Co. Donegal, said on social media that his hotel's electricity bill had risen from approximately €12,000 a month to €30,000. He described the situation as a "nightmare".

Sign up to The Business Plus Panel to help shape the business decisions of tomorrow and win vouchers for your opinions! 
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram