President’s Report – May 2023

We are now a third of the way through 2023. Valentines, St Patrick’s Day, Mother’s Day, Easter and President Biden have come and gone. With a spring in our step and Summer just around the corner, life for most of us is still consumed by the day to day running of our businesses. The daily challenges we have all being experiencing haven’t eased. If you’re reading this, you are not alone. Our costs are out of control. Energy prices might be dropping slowly, but the damage that they have caused to some business means that some will never recover. Our food costs have always fluctuated, but what we are seeing at the moment is simply mind blowing. In some cases, I’ve seen products that are bought once a month double and triple in cost. If you are able to buy in bulk you have some chance but a lot of those one of purchases have gone through the roof.

Last month I mentioned the Warehoused VAT, well the day has arrived. From this month, 3% interest will be applied to your outstanding liability. The only saving grace is that you don’t have to start paying it back until May of 2024. At that point you can pay it off or agree to a phased payment agreement with Revenue up to an extended 60 months. The hospitality sector alone owes close to €400 million euro and with that burden associated to so many restaurants we fear for more closures. All this before we consider the already volatile subject of staffing, or even the VAT going back to 13.5% in September.

April 2023 Review

Not a bad month, Easter and the mid-term was good for business in general, listening to fellow restaurateurs around the country the feeling is still one of optimism. The cost-of-doing business might be negating all the good but at least in most cases restaurants, cafes and gastro pubs are generally busy. People are still coming out, however their habits have changed and now seem set. Out early and home early is the long-lasting hangover of Covid that won’t go away. In a lot of cases abated by the fact that it’s still impossible to get a taxi home when you want one. But as I said, our customers are still coming out and that is hugely positive considering the times that we’re in.

With that in mind, there are only so many price rises to our menus that they will take. I’ve seen cases where restaurants have lost 6-8% of their net margin to a point where they are only breaking even. Restaurants simply can’t survive on those margins, very few (if any) business could. Therefore, they are forced in many cases to pass it on. The rising cost of inflation in most cases are pricing themselves out of business. The VAT must simply remain at 9% for hospitality. The government’s projected budget surplus of over €16 billion for 2023/24 is testament to that. Remember #keepvat9.

With over 2 weeks to go to the Final of the Irish Restaurant Awards 2023 I’d like to invite you all if you haven’t already, purchase your tickets via the office. The awards this year have exceeded that of any previous year and the demand for tickets has been the same. A great night is in store for all the lucky nominees and the chance to celebrate your amazing staff and businesses is not to be missed. Looking forward to seeing you all on the 15th.

Yours in catering,

Paul Lenehan

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