Time is running out for Pascal Ousignac, chef at the Michelin-starred Gascon Club, as he counts down to the crucial Christmas party season.
“We’re not full at the moment. We’re obviously hoping that will increase. We’ve booked quite a few Christmas parties but it’s down from previous years,” said the 55-year-old.
‘I still have a few tables available on a Saturday in December that need to be fully booked. We’ve never had this before – in November and December it would be full in previous years.
“I think right now, because of the economic situation, people are waiting to see if they have enough money before committing.”
Employment issues have forced Ossignac to close Comptoir Gascon, his small French depot near Smithfield Market in central London, and the workforce at his five remaining restaurants has dropped to 60 people from the 160 he employed before the pandemic. He is “terribly afraid” that a lot of restaurants might go under in the months after Christmas.
Osseniac’s fears are echoing in cities, towns and villages across Britain – a pattern of lockdown many fear will accelerate as recession, rising rents and shrinking household spending combine with the erosion of public transport and railway strikes.
Members surveyed by UKH Hospitality, the British Beer and Pub Association and the British Institute of Innkeeping and Hospitality Ulster were expecting a vacancy rate of 17% this Christmas, compared to the current vacancy rate of 11%. This means that 33% will reduce venue hours and 29% will simplify their menus this Christmas.
Osiniak said there was “nothing” in Chancellor Jeremy Hunt’s fall statement to address the employment crisis in the industry.
“I don’t think there has been anything that deals with the biggest problem with hospitality which means we can’t keep venues open or operating at full capacity,” he said.
Since January, Osiniak has had a vacancy for a full-time pastry chef, but has only been able to fill it in the past few weeks, a situation he has never seen before. The staff shortage, which he blames on people returning to Europe during lockdown and since Brexit, means the Gascon club is no longer open for lunch and only serves dinner.
“Brexit is the main reason why we have these employment issues. Previously it was easy for Europeans to come here and work, but it is not the case anymore, so now they choose other cities like Paris or Madrid.”
The UK Hospitality Survey found that more than a third of hospitality businesses are at risk of failure in early 2023 due to rising costs. Figures from the Bankruptcy Service showed that the number of restaurants and food outlets across the UK entering liquidation increased by 46% in the three months to September.
While Hunt’s statement in the fall included a £13.6bn package to support business rate payers, industry experts criticized the lack of focus on economic growth.
“It’s absolutely heartbreaking, we’ve worked so hard and walked away with nothing to show after almost three years,” said Arwen Beaton, the publican at The Digger’s Rest in east Devon after closing its doors for the last time. Peyton, 48, and partner Daniel Kelly, 42, took over the thatched pub in the picturesque village of Woodbury Salterton in April 2020 at the start of the pandemic.
The couple offered free food delivery to vulnerable people and opened a shop selling essential items to locals, before reopening after lockdown.
“At the beginning of this year we were in a good place, we somehow got through covid and everything looked positive, and then we had a huge cost spike,” Peyton said.
The pub’s energy costs “tripled”, food prices skyrocketed with staples such as cooking oil more than doubling, and the pub operator who owns the building increased the rent by 10%.
For the first time, Peyton said, clients were “talking about their finances in the pub” and footfall began to fall as they went from meeting regularly once a week to less than once a month.
In August, The Digger’s Rest fell 30% from the previous year’s acquisitions, forcing it to close its doors permanently on November 7.
Three other pubs within a five-mile radius have also closed their stores in recent weeks, Peyton said, adding that country pubs in particular have been “part of the community” and when they leave “you’ll struggle to get them back.”
Emma McClarkin, chief executive of the British Pub and Beer Association, said the industry remains on a “knife edge” and was “deeply disappointed” that the 12.5% VAT rate had not been implemented.
UKH Hospitality chief executive Kate Nichols welcomed business rate support but said the chancellor had failed to outline “any plan for economic growth” and there was “nothing to give businesses confidence, let alone investment”.
James Schiavarini, owner of Il Portico, an Italian restaurant opened and run by his family on London’s Kensington High Street for 55 years, has described the problems with hospitality as the “five horsemen of the apocalypse”.
He said rising prices for personnel, supplies, food and energy, the impact of the cost of living on his customers and the despondency of the economic situation have all affected the industry.
Schiavarini said “economic headwinds” forced him to close Il Portico’s sister restaurant Pino, also in Kensington, in June this year.
He added, “After the lockdown is over, people thought in this idea that everything would be like the Roaring Twenties and the economy would fly by, but that didn’t happen.”
Getting staff has always been difficult but “then Covid and Brexit happened and it became very difficult to recruit,” said Imogen Davies, co-founder of Native, in Mayfair, west London, which prompted the company to drop plans to open an extra day.
Increasing energy costs from the Russian invasion of Ukraine is the biggest problem for Alex Greig, who owns Fuggles Beer Cafe, which has premises in Tonbridge and Tunbridge Wells in west Kent.
The 37-year-old – who also owns a bottle shop in Tunbridge Wells – has seen a £10,000 increase in energy bills but warns that without the government rebate, costs would have been £40,000 and made the business ‘unviable’ .
Greig said the government’s announcement of business rates was “a thing” for the industry, but he called on the government to clarify exactly what energy subsidies will be available to hospitality businesses next year.
“Our customers will get less money and our costs will be much higher. That is why we need certainty to motivate us to invest in our business and encourage us to grow.”
Gregg said the “VAT cut” would be a “huge stimulus” for the industry and “give us confidence so that we can continue to invest”.
Kenny Atkinson, owner of the Michelin-starred restaurants House of Tides and Solstice, both in Newcastle, said his energy bills had “tripled” and he had struggled to get suitable staff, with seven vacancies currently.
There is no direction and no confidence from the government. We don’t ask for any handouts, but lowering VAT can help us grow our business.
A spokesperson for the Department for Business, Energy and Industrial Strategy said it had “delivered an unprecedented package of support including value-added tax cuts, work rates holidays and government-backed loans worth around £400 billion”.