Hospitality businesses in Northern Ireland are struggling to break-even amid the cost of living crisis, an industry body has warned.
Colin Neill, Chief Executive of Hospitality Ulster, said the industry was hit by increasing supply and labour costs as it attempted to recover from the pandemic. He warned the situation may worsen throughout the summer and into winter months.
The increased cost of living is evident for both business owners and customers which makes keeping outlets afloat a more difficult task.
Read more: NI restaurant closing after 'hard few months'
It comes as a number of hospitality businesses in Northern Ireland have announced they're closing in recent weeks, citing rising costs as a main factor. Bia Rebel on the Ormeau Road closed their doors last week, while Coulter Restaurant in Ballynahinch announced their closure this week just one year after opening.
"The current cost increase in our world is about 18%, it's shocking," Colin told Belfast Live.
"This is actually worse than Covid. You could see an end coming, there were interventions that were feasible.
"The problem now is you're in a crisis and most of the interventions would have to come from Westminster and they're preoccupied with other things. We need more support around rates for pub and restaurants.
"Rates are based on figures pre-Covid, so we need a cut on rates there. Those things would make an incredible difference.
"The Asda income tracker is just out and has had its biggest fall in household income, so you're caught on both sides. It said there's a 17.2% drop in UK family spending power.
"So prices are going up, consumer's money is going down, and people can't afford to go out so will maybe decide to have a meal and bottle of wine at home instead."
Colin said the main issue businesses are alerting them to are rising supply and labour costs. He said this is a correlation with the increase in fuel and the impact of the Ukraine War.
As a result of supply chain issues, businesses are forced to pass price increases on to customers. An increase in energy prices is also leading to venues closing for extra days to keep their head above the water.
"In the UK we have more vacancies than people unemployed and looking for work. The cost of meat, grain, cooking oil have gone up, then the cost of energy is just unbelievable," Colin explained.
"I've seen premises going from £7,000 a month in energy bills to £20,000 a month.
"To break even on cod and chips, you need to be charging £10. You add that to a café and restaurant who have to pay for the extra sit-in costs as well, it's difficult for businesses.
"For an electric pizza oven, it takes the guts of £300 a day to heat it at the minute, you have to do a lot of pizzas on a Monday, Tuesday, or Wednesday to break even with that. It's maybe viable on the weekend, but we're seeing people saying they can't do those numbers and are instead closing during the week.
"Staff shortages mean you're concentrating your staff on busy days. The start of the week typically isn't busy, where people would have maybe went out for lunch specials, they just can't afford to do that now.
"We're in a position where a huge chunk of the industry are struggling to even break-even and we're faced with probably more inflationary costs at the end of the summer."
He said Hospitality Ulster are inundated with calls every day from concerned business owners worrying about keeping the doors open.
"I fear this is going to grow as the summer goes on, then as we hit autumn it will continue to get worse, as people will have to turn on their heating, all the back to school costs, and it's looking like there will be further inflationary costs by then," Colin said.
In order to help the industry recovery, he said it needs the same sort of government support it received throughout lockdown.
Colin added: "Behind the scenes, our costs of doing business are already up 18% with inflation and I see that rising as well. It's going to be awfully tough and we will lose businesses and jobs unless Westminster intervenes.
"We came out of Covid and thanks to government support most of the industry survived, and they wouldn't have without that support. But we did come out thinking let's concentrate on rebuilding the industry.
"Unfortunately this has now hit an industry that has no financial reserves to subsidise themselves for months. My fear is we're just going to see this escalate uncontrollably, and it's an absolute sin because we have such a thriving range of hospitality businesses here."
READ NEXT:
-
Belfast restaurant announces closure due to cost of living crisis
-
Belfast Jobs Fair helping community amid cost of living crisis
-
Pressure on businesses 'likely to get worse this autumn', says NI chamber boss
For all the latest news, visit the Belfast Live homepage here. To sign up to our FREE newsletters, see here.
