Will Business Rates Burst Londons Thriving Restaurant Scene?
When they work restaurants are incredibly rewarding businesses to run, they act as a hub for the community, bring pleasure and nourishment to people and even support the local economy and wider community with their business.
But running a successful restaurant is now harder than ever, notoriously hard to run and difficult to staff, with small profit margins, and a hugely competitive market to compete on. Our main costs are rent, staff, and food, but other amenities also add up from recycling to energy, leaving a tiny safety net to catch us when we fall.
Unfortunately social and economic climates are getting harder and the risks higher. London rents are unethically high – for residential and business properties – causing unmanageable business rates, which are set to go up in further with the changes to be made in April by the chancellor.
The affects of Brexit are being felt – many restaurant staff from Europe and further afield are having to leave, creating serious staff shortages and further wage difficulties. And as the pound weakens, food prices are going up, costing restaurants thousands of pounds each year, pulling the purse strings tighter.
While all these costs are rising the price that people are prepared to pay for food stays the same – due to little wage increase and an unrealistic expectation for ever cheaper food. This means people are spending less eating out and generally have less expendable income.
These kinds of pressures push out independent shops and restaurants first, limiting choice to a few soulless restaurants, but with these sorts of increases we are starting to see even the most powerful restaurants topple.
“Restaurant insolvencies increased by 20% in 2017” The Insolvency Service
Putting business rates up even further will be the nail in the coffin for many good quality restaurants rendering survival impossible. This way of taxing restaurants is unsustainable, hell its even unethical and does not support good business.
As the economy squeezes ever tighter we all need to become ever more resourceful to survive. A sustainable philosophy considers cost as well as the environment and promotes an efficient system that is diverse and resilient. Tom Tanner from the Sustainable Restaurant Association says they have just done a survey that confirms that customers want food businesses to be sustainable and transparent about their business. We must listen to our customers if any of us are to survive.
Ultimately prices will have to rise for customers but if customers are not able to pay it. Then that means the restaurant bubble will burst.
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