It seems that every day there’s another bar or restaurant closing down across the UK. Big names too are also in trouble. Take Frankie & Benny’s, I remember growing up my Mother (Mither) taking me through to Aberdeen to see a film (Ti i’ Picters) and having a meal at Frankie & Benny’s just across the square. Also the Top 50 Cocktail bars UK list has been hit, with the Pineapple club in Birmingham closing and Cottonmouth in Nottingham also closing to name but 2. So Why are all the bars and restaurants closing down?
Closer to home;
- Candy Bar, Edinburgh
- August House, Edinburgh
- Metropolitan Cocktail Bar an Restaurant, Glasgow (After 20 years of being in business)
- Gin71, Glasgow (After 10 years of being in business)
- Charlie Browns, Glasgow
- The Cocktail Mafia, Edinburgh
- G41, Glasgow
- RX, Aberdeen
- BarBelow & Olive Alexanders, Aberdeen
And those are only the bigger names, specifically in the cocktail sector. I’m sure we can all name at least 5 big restaurants that have closed down close to us and then local pubs (they’ve had it hard for a while) have also been closing down.
I’m going to use a mix of first hand “this is why it’s hard for us as FAFFLESS and Bonne Nuit” and testimonies from my peers also in the industry, as well as newspaper sources etc. to do a deep dive into why this is happening.
Inflation
In October 2022, inflation hit 9.6% in the UK. Two years earlier in August 2020 it was at 0.5% according to the Office of Statistics.
But what does this actually mean? In short, a lot. Effectively and super over-simplified it means your spending power is less, a lot less. You’re having to spend more more on necessities such as rent, groceries and power bills (we will get to that)
F***ing energy bills
Ugh. Don’t.
Our energy bills (in the old bar) jumped from £300 a month, to £4760. Within 2 years. How the f*** are we meant to deal with that? the old bar only had 20 seats. It was tiny! That means that every seat had to make me £238 a month, just to pay to heat the stupid thing. It would have been cheaper for me to burn the chairs to generate heat and just replace them.
Now imagine, we had that problem with a tiny bar, how were the bigger bars coping? Restaurants where people are sitting still for hours? Hotels where the staff can’t control the heat in every room from the reception and you’ve got some tourist who left the heating on full all day while they were out?
In the UK, in January 2024, the average prices Per Kilowatt Hour for Electricity was 47 cents, the average in Europe was 29 cents. Just to hammer home the point about Brexit too, EDF is owned by a French Company, E.ON is German and Scottish Power is Spanish. All of which have cheaper rates in Europe than in the UK.
Minimum wage increases
Staff costs will always (unless stupid energy prices get in the way) be the most expensive part of hospitality businesses.
In 2021 minimum wage was £8.72 an hour for over 23 year olds, in 2024 it was £11.44. That’s nearly a 32% increase in 3 years (it’s going up again in 2025).
I’m all for people getting paid more, however there’s no way that we could increase our prices by 32% in three years, no one would come.
Chef shortages
Every since covid, when all the chefs realised that there was a world outside their sweat-box of a kitchen that would probably pay them more and with a lot less stress, stupid front of house staff and annoying owners, they all decided to go get other jobs. See below on The Brexit Problem.
The ones that are left are asking for hilarious wages because there aren’t any chefs or don’t know what they’re doing.
For a while before covid there was an epidemic of Chefs going on what we would call the “Agency Circuit” mainly because you get much higher hourly rates, this sounds fantastic. You get to travel around, learning from a multitude of chefs, making more money, seeing more of the country, great right?
Wrong
So what would normally happen; The restaurants that are relying on agency staff are relying on them because they’re in the Sh*t, therefore there’s no time to teach you. So you are bouncing around from kitchen to kitchen with your nice shiny knife set, learning absolutely bugger all. Therefore you don’t progress in your career, but you’re a chef, you’ve got an ego, you’re the best chef. So you put on your CV that you’ve worked all over the UK for years, therefore you should at least be Chef de Partie, Sous? bugger it I’m a head chef, I know what I’m doing, I’ve been around the block, how hard can it be? Oh I’ve ballsed it up and I’ve basically just closed down a restaurant single handily.
Cost of Product – The Brexit Problem
I’m sorry, this blog post so far is just a greatest hits of the UKs’ problems.
The Brexit Problem has thrown a multitude of different challenges at the hospitality trade, and the UK in general.
- Cost of product – a lot of our products (wine, cheeses, cured meats, spices, fresh produce etc.) comes from the EU. Added checks, added paperwork, added Faff, added costs.
- Quality of product – along with the physical cost of product being an issue, the time it takes fresh produce to come over from the EU has went up, meaning your lovely Spanish tomatoes? less lovely. That fantastic Carbonic Maceration Gamay from Morgon? Slightly more on the turn.
- Lack of Staff – The EU tends to have a completely different view of hospitality workers than we do here in the UK. It’s seen as a viable career choice over there, they teach it at school. In the UK it’s a summer job, or a stop-gap job. I remember when I worked at Restaurant Andrew Fairlie, at the time the only 2 Michelin starred restaurant in Scotland, the highest in Scotland. My Grannie once called me asking when I’m going back to university to get a real job.
- Less Tourism – It’s now harder to get into the UK from the EU, meaning less Europeans are bothering to come over. Why would they? they used to be able to jump on a ferry in their campervan and barely be stopped on their way here.
- The Value of the £ has fallen through the floor. Yes for the tourists that are still coming, their spending power has increased as the £ is worth a bunch less comparatively, which means in theory they are spending more £ on better quality products, but that doesn’t help when the £ is on the floor.
The fact that British hospitality (as a whole) has been pretty terrible for a while
Now another controversial topic for me to get cancelled on.
Let me just clarify, what I mean by this is probably worse than what you’re thinking.
British food does not have a good rep. A pub serves a purpose. A restaurant that is ‘fine’ serves a purpose. However, since covid, everyone has realised they can pour pints at home, they can make a carbonara at home. So why am I being charged 3x the price I can pay to do it in the comfort of my own home? with my TV? my own music? I don’t have to listen to the obnoxious table next to me, or even worse, a Sommelier.
I think that this has tainted everyone’s perception of ‘going out’. Nowadays people want to go out for an experience.
As a Bar or Restaurant, the pressure is on us much more than before to be seen as Value. This doesn’t mean cheap, it just means people need to feel they are getting their monies worth. This can be super difficult as everyone’s perception is different.
Take my meat & cheese board, at the moment a 2 person board is £25, this includes 5 cheeses, 3 meats, 2 different crackers, bread and a chutney, all of which we are getting direct from Spain (apart from the bread, shoutout to https://foodstorycafe.co.uk/ for making us fantastic bread, and our Chutney which is made on the isle of Arran. On average this will cost me about £15 to make because all of the above is pretty expensive, that £10 also has to take into account VAT (20% of the £25), the building, heating, toilets, water, waste, music license, breakages, insurance, staff and all the other silly little things we’ve got to do.
After all that, we have a few reviews telling me that my cheese board isn’t good value. Politely go boil your head.
You go to another bar, and they have great chunks of the cheapest Brie available, some pretty terrible blue cheese (Terrible blue cheese is why everyone thinks they don’t like blue cheese) and cheddar. Who. The. F***. puts cheddar on a cheese board and then turns round and charges someone for it. Come on. Have some standards. Some pride in your work.
I’m sitting in an airport writing this and I’m going for a beer to calm myself down.
Fucking cheddar.
Rent
Rental prices haven’t (on the whole) came down with the crash in hospitality. Why should they? In theory your building is worth more because of inflation. However at the moment hospitality venues are a terrible short term investment. Landlords have had to make the decision between an empty building, and slashing rent.
Business rates + random costs that no-one thinks about
So as a business we have to pay business rates, kind of similar to your Council Tax, however, you know all those things that is included in your council tax? Bin collection, waste water etc. As a business, those are all extra.
Business rates are purely just for the pleasure of running a business. Bins are extra, Water is Extra, Waste water is extra.
You know that nice wineglass you just accidentally smashed? That cost me £8.75 ex. vat a stem. That plate you just heard smash in the kitchen? £12. Please be careful with our stuff.
Ice machine went down? Minimum of £80 ex. vat
£2000 ex Vat twice a year to get extraction fans cleaned professionally to keep our insurance happy.
Oh our soft drinks fridge has decided to be a freezer? (actually happened to me this week) Popped all the tops off the glass bottles in the fridge. Do we take the risk pay the £80 ex. VAT for an engineer to come out and look at it or do we just take the hit and buy a new one? (£450 ex VAT) + cost of ruined stock.
The Chef just burned something in the kitchen? you better hope it wasn’t something expensive or that they’ve not ruined some equipment.
On your fully booked night you have a table of 5 not show up, great chat.
Is that a customer turning up the heat on the radiator? Did that customer just open that door and let all the heat out because they were too warm?
Other misc. costs;
- Music license
- Napkins
- Sanitary products (also extra to get them properly disposed of)
- Soap for the bathrooms
- Different soap for the staff
- more toilet supplies
- Blue Roll, we go through an ungodly amount of blue roll
- printing menus
Breakdown of how much money we make
Let’s use this example;
A table of 4 come in and spend £100 on food and have nothing but tap water (free in Scotland)
- 20% goes to VAT (we don’t pay VAT on buying food, but if we cook it then serve it we have to charge it, which means we then have to pay that back) £80 left
- Cost of product – 33% (every £1 I spend, traditionally we have to charge £3, you’ll see why) £47 left
- Cost of staff – 30% (including time to iron & fold napkins, clean toilets etc) £17 left
- Now that £17 has to pay for everything else, all the silly little things mentioned above for that table. lets assume 10% £7 left
That’s all assuming everything goes to plan, no mistakes in the kitchen, no breakages etc.
Local Factors to Aberdeen
There are a number of challenges that, while not unique to Aberdeen, seem to hit Aberdeen and directly affect us.
- Bus Gates – everyone in Aberdeen seems to hate the bus gates. I don’t mind them, they only affect you if you are used to doing certain journeys, and real specific ones at that, get on with it, boohoo you have to actually think about where you have to go and pay attention to the road. Where I think it’s went wrong is that the local council have lost the narrative for it, everyone thinks it’s the end of Aberdeen because there are 3 bus gates in the centre. The issue has been people whinging and complaining online, on social media and in the press. This has meant that other people, who it wouldn’t affect, have stopped coming into the city centre.
- LEZ – Again, I welcome the Low Emission Zones. They’ve been a pain for me because I’ve had to get rid of my work van in favour of a new car on business lease, but that’s because I have a business slap bang in the centre of the LEZ. For everyone else unfortunately I don’t really see the problem, you can still get to all the major car parks in the centre, then it’s just a short walk to wherever it is you’re going.
- Commercial Rent in the Centre – This is where I may get a bit ranty. There are so many schemes just now in Aberdeen – https://www.ourunionstreet.com/ for example. But what they haven’t really done so far is reduce the actual rental prices of the properties. This isn’t their fault, most of the main street in Aberdeen is owned by big city pension funds, property managers and people who just plain don’t need the money. As an example; there is a property, not far from my venue, that is £5k a month in rent. Not including VAT, or electricity, or business rates, or bins, or water, or staff or a fit out. Having viewed it, there is no shop that I can see going in there that is going to be able to make you enough profit to pay all that, plus make you some money as the owner.
- No Taxis and crap buses – Getting a taxi in Aberdeen can be an absolute nightmare, especially the later it goes on. The buses are unreliable and finish super early also. Oh! and they cost more than any other city in Scotland?
From my point of view, most of these issues are easily solvable;
- Bus Gates – Shut up and get on with it, or take a bus (Better for the environment, cheaper etc.)
- LEZ – Shut up and get on with it, take a bus or park somewhere you can get to without going through the LEZ. Your magic thing in your pocket that you can connect to your car speakers will tell you where to go.
- Commercial rent – Landlords need to wake up, you’ve either got an empty building costing you money in rates, or you have someone in on a deal that makes you both some cash.
- Taxis & busses – This one is a little more tricky – I was just recently informed by a taxi company that booking a taxi for a specific time doesn’t mean you’re getting a taxi at that time, you only get one at that time if there is one fee (What the Actual F***) – Hopefully uber coming to the city soon gives the taxi companies and the bus companies a kick in the right direction.
Conclusion
Be nice to your local Restaurants. We work very hard, for very little. Don’t ever use the “but I’ve spent a lot of money here” line whenever you’re not getting your own way. If we say that the restaurant is fully booked, but you can see tables free, they’re probably booked. We need your money, we aren’t turning you away to ruin your night.
I’ve painted quite a bleak outlook, and if I’m honest I don’t see it getting any better any time soon. Kier Starmer is announcing the new budget at the end of this month (October 2024) and we are all glued to it, this budget will dictate how well we all do, how many of us close.
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