Welcome to your January Newsletter, I hope that the festive period was enjoyable and that you managed to catch a break at some stage with family and friends. All work and no play are a recipe for disaster, it is important not to take on all of the pressures our industry throws at us. Health of body and mind is of most importance and will keep you on your ‘A’ game for family and work colleagues. Easier said than done and financial pressures can be the most enduring. This is why December needs to be rewarding enough to keep the wolves away for the beginning of the new year.
January is always a challenging time for restaurants and 2020 is forecasted to be especially challenging as we have done a full cycle of the 50% rise in VAT. As predicted there has been a huge amount of closures as the cost of doing business has become simply unsustainable. The baffling part of all of this is the fact that Pascal Donohoe was aware of the risks of reinstating the 13.5%. This government is aware of the risks of two minimum wage increases in a single year, yet they continue to lump on added pressure to arguably the most labour-intensive industry in the state. I believe that the majority of restauranteurs pay over the minimum wage, the issue is the domino effect through each restaurant. Many establishments are touching 40% which is quite alarming. It is quite clear to me now after nearly a year into my presidency that we are easy pickings. We are continuously accepting everything that is thrown at us. At times I feel we are a constant stress test, I would go as far as to say we are economic lab rats. We hear different ideas being thrown into the media circle to measure reaction for example, the coffee cup levy, the sandwich boards, wages, VAT, on top of local authority rates. Many businesses that had negotiated long term leases back in the crash will have contracts coming to an end and landlords will not be renewing rents at 2008 prices. Raising rents pose an impossible task for restaurants in our towns and cities. The outcome for all of this will be devastating to our tourism stats which are already in sharp decline.
Aside from VAT our insurance premiums have been the largest burden restaurants have to face. Some restaurants cannot even get a quotation. The Alliance for Insurance Reform have been working hard to reduce these premiums, but the concern is the time it is taking for significant change and the collateral damage in the interim. There doesn’t seem to be an easy fix until the unethical minority in the legal profession change their tune for the better of the economy and stop pursuing self interest in such a manner. Ie ‘No Win No Fee’
The time is now to let our voice be heard and demand a reinstatement of the 9% VAT rate for restaurants. It is time to make it clear to our politicians that these persistent increases are destructive to business and votes will be lost unless there are immediate changes that will release pressure in our industry. It is important that we have the backing of our workforce, a collaborative employer and employee relationship will ensure the long-term success of our industry. I along with my council colleagues and the team at RAI are looking forward to rolling out our employer programme over the coming days and it is my hope that all of our members embrace this programme which will make our industry more attractive to future employees.
I leave you with a task of writing a personal letter to your local TD. We are demanding immediate action in a reinstatement of the 9% VAT rate for food. I wish you the very best and I hope that January will be kind.
Mark Mc Gowan