TOM KERRIDGE: Energy bills spell disaster for restaurants and cafes

September 2, 2022

My fear that we’re all facing ruin: TOM KERRIDGE reveals his concerns that soaring energy bills spell disaster for everything from high-end restaurants to street corner cafes

Like anyone with a fixed rate energy deal about to come to an end, these are scary times. But as a restaurateur (or indeed, any business owner) things feel apocalyptic right now.

That’s because, unlike for domestic customers, there is no price cap on what businesses can be charged for gas and electricity – and so, disaster looms.

The latest quote I’ve been given for one of my restaurants sees a staggering 600 per cent increase. That will take my current annual energy bill for that restaurant alone from £60,000 to £420,000.

My other five restaurants have much longer to go before their fixed rates run out, otherwise I would be facing ruin.

Things were tough enough as it was – these energy hikes come on top of already escalating costs across the supply chain, and at a time when hospitality is still clawing its way back to profitability following Covid.

TV chef and restauranteur Tom Kerridge owns six restaurants: As a restaurateur (or indeed, any business owner) things feel apocalyptic right now

The buzz around eating out is back, but for how long when people are now worrying how they’ll be able to afford to turn on their own ovens, let alone pay for someone else to cook for them?

My current energy deal finishes at the end of this year, so I’ve got a few months left to shop around. Although, while I pray that figure will come down in time for me, there’s every chance it will go even higher. So, what am I supposed to do?

Do I sign up to an exorbitant deal, knowing that eventually the lights will go out because it will, quite literally, become impossible to pay to keep them on?

Or do I wait, clinging on in the hope that prices will drop, or that the right help will come along in time to give me and my industry a fighting chance of survival?

I’m not a gambler, but right now it feels like I’ve walked into a bookies and started betting on horses even though I don’t know the first thing about horse racing.

What is certain though, is that this level of increase will sound the death knell for anyone in hospitality – whether they’re running a high-end restaurant like mine or a street corner café.

The local pubs, cafés and sandwich shops, places that we all know as the beating hearts of our communities, won’t face bills heading towards half a million pounds a year – but their costs will go up proportionally to astronomical levels. Imagine running a small independent country pub, where you live above the shop and don’t get much trade at lunchtime, but you make just enough of a profit from loyal locals to eke out a living wage.

If your energy bill is suddenly increased by 500, 600 or 700 per cent, you will have no choice but to close your doors – that’ll be another community hub lost, with little hope of it ever reopening.

We’re not quitters in this business. The fact that we still have a hospitality industry following the challenges of Covid proves that.

I know many businesses will be looking – just as domestic households are – at ways to cut back on their energy use in the desperate hope they can stay afloat. But, frankly, that’s futile. In hospitality your options are limited.

Your fridges and freezers have to run 24 hours a day; your stove might go on at 7am and only get switched off around midnight.

It’s not like cooking at home, where you can switch to using a slow cooker instead of the oven and tell everyone to put a jumper on to avoid having to heat the dining room.

The only other option for people will be closure – hopefully just temporarily.

But in many cases, this will be permanently.

We need the next prime minister to step up and take our impossible situation seriously, and then come up with tenable solutions.

Having an energy price cap combined with a reduction in VAT would maybe give us a fighting chance of clinging on to our businesses.

Because, make no mistake, if nothing is done to help us, hospitality will die.

And along with it will go every job that we create and every point of social contact that this country’s pubs, restaurants, cafes and pizza parlours provide. That cannot be allowed to happen.

Last orders for pubs? 2 in 3 ‘may shut without bills help’

By Sean Poulter, Consumer Affairs Editor

Up to two thirds of pubs may shut this winter unless help is urgently given to tackle rising energy costs, a business chief warned yesterday.

Small businesses – unlike householders – have no cap on energy bills and many are being hit with huge increases, in some cases eight times higher.

This is affecting firms across the high street, while schools, care homes, hospitals and other vital public services also face being crippled by vast bills.

Ruby McGregor-Smith, head of the British Chambers of Commerce (BCC), warned: ‘At the moment we’re talking about up to two thirds of pubs may have to shut their doors.

‘We cannot be in a situation where more and more businesses are shutting down because of costs that are absolutely outside their control. They cannot get support in any other way, it’s not as if they can borrow the money.’ Baroness McGregor-Smith continued: ‘They’ve come out of Covid. They’ve already got loans. They’ve already got higher costs from national insurance. There still isn’t a reduction on VAT.

TV chef and the holder of two Michelin stars Tom Kerridge shone a light on the crisis in the hospitality trade, saying energy bills at one of his pubs have gone from £60,000 a year to £420,000

‘They absolutely have got to deal with the rising cost of inflation as well… This is too much, they have to have support now.’

TV chef and the holder of two Michelin stars Tom Kerridge shone a light on the crisis in the hospitality trade, saying energy bills at one of his pubs have gone from £60,000 a year to £420,000.

He said many people are considering ‘mothballing’ their businesses through the winter because they cannot afford to remain open. ‘The numbers are so ridiculous and ludicrous that no wonder so many businesses are closing and talking of closing,’ he said.

The BCC has forecast that the UK will be in recession before the end of the year. Baroness McGregor-Smith, a Conservative peer, told BBC Radio 4’s Today programme that measures suggested by Chancellor Nadhim Zahawi, including reductions in VAT and business rates for retail and hospitality, is the ‘right territory’ to help people this winter.

But she said: ‘I think unless there is immediate support, we will see many businesses close their doors this winter.’

Her warning came as craft brewing company Brewdog said it was closing six outlets – in London, Motherwell near Glasgow, Aberdeen, and Peterhead in Aberdeenshire – amid soaring energy bills that mean they are no longer financially viable.

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