Pubs and restaurants have spoken of their alarm and despair over soaring energy price rises. One curry house owner fears he'll be 'closed before Christmas' over the 'disgusting' rate hikes.
It comes as the co-founder of Tampopo and East Street restaurants estimates the monthly energy bill at just one of his sites, even before winter properly draws in, will be around a staggering £9,200 a month. David Fox said the situation was a 'f*****g shambles' and would 'call into question the affordability of running a restaurant' for small businesses and established eateries across the UK alike.
It comes as five organisations representing the UK hospitality sector joined forces to write to the Government calling for urgent action on energy prices - and the devastating news that energy prices for British households are set to rise by 80 per cent by October as regulator Ofgem confirmed a huge rise in the energy price cap.
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The British Beer and Pub Association, UK Hospitality, Night-Time Industries Association, Music Venue Trust and The British Institute of Innkeeping jointly said rocketing costs were 'becoming a matter of existential emergency' and spoke of an average energy bill increasing by as much as 300 per cent. Businesses and jobs in the sector are 'at grave risk', they warned.
The situation heaps further pressure on the hospitality sector, as the Manchester Evening News revealed last month how many restaurants and bars were still struggling to fill staff vacancies following the Covid-19 pandemic, with data from mid-June showing the sector was experiencing 83 per cent more vacancies compared to March to May, 2019.
And that's on top of spiralling food prices and many households choosing to stay at home to eat, forgoing the perhaps weekly meal out to save costs. The costs of refuse collection and drinks supplies are also rising.
Chef Gary Usher, who's behind restaurants like Hispi, Kala, Burnt Truffle and Wreckfish, revealed on Twitter he received the whopping electric bill for just one of his sites. He said: "We got an electric bill a few weeks ago for our unit in Chester. Kind of ignored it because we just assumed it was a misprint, like too many zeros or something… It's not. Our electric bill for the quarter at our events unit is 26 thousand pounds."
"Potentially though someone has been leaving the store cupboard light on all day on a Sunday when we’re not there so we will just double check that before we leave."
Johnny Gupta, 51, says he has put 'blood, sweat and tears' into his business, the popular Lime Tree Indian restaurant on Bury Old Road, Prestwich, for 14 years. Now he said he'll be forced to find an extra £6,000 a month just to cover his energy bills, not taking into the account the steep rise in food costs which in terms of spices alone, is hitting the restaurant hard.
"I'm pretty confident I speak on behalf of most businesses," he said. "I run a successful restaurant, and have done for 14 years, but I can't see a light at the end of the tunnel. Our gas bill has gone from £300 to £2,000 a month, and our electricity bill has gone from £700 to £4,000 a month.
"How are we going to pay these extortionate bills? Plus all the ingredients and products have gone up in price. We can't keep increasing the menu as no one will be able to afford it. No one is addressing the problem and no one seems to care, as if it doesn't affect them.
"People need to understand what the situation is. It's absolutely disgusting. We have built up a large base of loyal customers and they supported us throughout the Covid times. 60 per cent of our business was down - but we still managed.
"The lamb, the chicken, the oil - the costs are all going up and there are other bills, VAT and everything else. Businesses are going to fall down but no one is addressing the situation in Government. People are going to have no jobs and it is going to affect our mental health.
"We are decent people, but how are we going to make a living? It is absurd. I will be closed by Christmas unless something is done about this. I have poured sweat and blood into this business. We are genuinely hardworking people but we just do not know what we can do. The Government needs to help, and do it quickly."
Tampopo boss Mr Fox, meanwhile, spoke of egg prices rising by 45 percent and chicken by 25 per cent. He told the Manchester Evening News : "At one of my sites two years ago my weekly electricity bill was £325. Last year it was nearer £1,200 per week. So a cost of over £60,000 per annum. It's up for review during September and I'm being advised it's going to double to £120,000 per annum. That is a cost of £2,300 per week.
"This will call into question the affordability of running a restaurant and certainly on shifts where sales are below a certain level. At £2,300 per week that is £328 per day just for electricity. I would have to earn £520 in sales just to pay for the electricity.
"That is before any costs for my team, gas, and all the other costs associated with being open." It's a f*****g shambles."
James Bates, managing director of Maray Restaurants, which recently opened a restaurant on Brazennose Street in Manchester city centre and operates sites in Liverpool, said in Manchester, they are now paying £60,000 a year for gas and electricity. In 2020, it was £20,000, he said.
"It's forecast to go up again by another 50 to 100 per cent, so we are looking at energy prices for the first time far exceeding rental prices, which is pretty crazy," Mr Bates told the Manchester Evening News. "There is so much money flowing out of the business into energy costs.
"It's going to stifle growth - it's going to cause pretty much every single business to be in survival mode, which is just not a very sustainable way to be.
"There's a further issue that's been well publicised. Some energy companies are not even offering contracts to hospitality businesses because of the risk. Some are offering extortionate rates - 600 per cent above the current rate. Some are asking for huge deposits because of the perceived risk. The whole energy sector needs completely ripping up and starting again really."
Sadly, there have already been closures. The Albany, a popular and long-established hotel and restaurant in Heywood, near Rochdale, announced it would be closing its doors for the final time due to the 'ridiculous' rise in utility bills for 'greedy' energy firms. In Stockport, meanwhile, The Moor, a much-loved restaurant in Heaton Moor, cited similar insurmountable problems with increased overheads as the main reason for their permanent closure in April.
Representatives of pub bosses, meanwhile, spoke of a 'perfect storm' of energy bills and price hikes, with many boozers being forced to reduce opening hours and cut dishes from menus.
Emma McClarkin, Chief Executive of the British Beer and Pub Association said: "Rising energy bills are putting pubs in real jeopardy. Sudden, extreme price hikes are already forcing publicans to make tough choices, from reducing opening hours to cutting options on their menus.
"We are experiencing a perfect storm that is not only shrinking but eradicating profitability margins. We urgently need an energy price cap for small businesses before extortionate bills cripple pubs and we lose them forever in communities across the country."
And Kate Nicholls, Chief Executive of UK Hospitality said: "Hundreds of hospitality businesses across the country are staring into an abyss of closure and possible failure, leading to thousands of job losses; so it's now or never for Government help and support if this vital sector is to survive the extraordinary threats pushing much of it to the very brink of existence."
Sacha Lord, the night time economy adviser for Greater Manchester, said starkly, for many businesses, the 'horse has already bolted'.
As the price cap rise was announced on Friday he said: "For months we've been calling for an energy price cap for businesses as well as households. On the back of this mornings news, the horse has already bolted.
"Now, without an urgent energy reduction/rebate, it will be lights off for many in my sector this winter."
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