Earlier this year, Joe Macken was asked to consider running a pub and restaurant in west Cork. He was told by the owners that it was Graham Norton’s favourite place.
His response?
“I told them unless Graham is coming in to do three shifts a week, I can’t come to you. There’s no place for people to live,” laughs the hospitality consultant and former owner of restaurants such as Jo’Burger and Crackbird, pointing to the difficulties in both finding staff and accommodation for them in the industry.
And it’s not just that; high wage costs, soaring food prices and changing dining habits are other challenges. “There are so many issues; it’s not just the one thing,” says Macken. It’s all conspiring to create a perfect storm for restaurants.
RM Block
“It certainly is one of the hardest times of my career,” says Gareth Mullins, head chef at Anantara The Marker hotel on Grand Canal Dock in Dublin, where he is responsible for five food offerings, including the recently redesigned rooftop bar and upscale Forbes Street restaurant. “It’s a very, very tricky time to do business.”
Input costs are rising – latest figures from the Central Statistics Office show that food prices are rising at a rate of 5 per cent annually – far above the general inflation figure of just 1.8 per cent. Rising costs on labour are also “very much a real thing” says Mullins, given the increase in the minimum wage in recent years, plus the impending introduction of auto enrolment which will require businesses to contribute to their employees’ pensions.
And there is no expectation that things will change any time soon.
“I don’t see any change on cost, I don’t see light at the end of the tunnel,” says Seán Collender, who has been in the business for about 25 years as co-owner of the Kinara Restaurant Group and is president of the Restaurant Association of Ireland. “I just see a major shift in how we operate, and we have just got to get on board with that. Each business has to figure it out. In our own case, we just have to apply a laser focus to make sure we keep going.”
The sector hopes that there will be some reprieve in October’s budget, if the rate of VAT comes back down from 13.5 per cent to 9 per cent.
“It will be a huge help,” says Tara Lee Cogan, of The Pump House in Dunlavin, Co Wicklow. “Margins are so tight, and utilities have gone up so much.”
Mullins agrees.
“I think if it doesn’t, there will be a lot of fallout – of restaurants, in particular, that won’t be able to trade any more,” says Mullins.
But diners shouldn’t expect a cut in the cost of eating out.
“It will be subsumed into prices – it won’t be passed on, because there is no capacity to pass it on,” says Macken.
[ From the archive: Macken ‘consciously uncouples’ from Jo’Burger partnershipOpens in new window ]
So what’s a restaurant to do?
Collender fears that some restaurants might be “adapting negatively” in order to get it right, by shortening their hours or reducing their menus.
“They’re doing things as a survival mechanism,” he says. “But the problem is it’s quite reactive, as opposed to proactive.”
And pushing prices up to cover rising costs is a strategy that can’t keep working.
“We definitely can’t keep increasing prices,” says Mullins, as otherwise diners will just stop going out.
This has already started to happen, with restaurants citing a drop in footfall at weekends.
“I do feel less people are going out,” says Mullins. “It’s definitely a thing that Thursday is the new Friday,” he says, noting that corporates are also bringing clients out to eat less.
A shift in dining habits is hitting the bottom line too, with use of weight-loss drugs and people drinking less also factors.
Last year, experienced hospitality professionals Máire Ní Mhaolie and Geoff Carty opened The Yew Tree restaurant in the south Dublin suburb of Terenure. But, while the first year was “amazing”, the numbers coming to the restaurant started “dwindling” over time.
“Where once we’d see people once a week, then we’d see them once a month. We couldn’t sustain it any more,” says Ní Mhaolie.
And when people did come in, they were spending less. Instead of a starter, main course and dessert, diners were sharing a starter, or opting for just a glass of wine each rather than a bottle.
“I don’t think there’s anyone out there that hasn’t been affected by the rising cost of living,” she says.
So if prices are as high – or as close to it – as the market can withstand, restaurants now have to find other ways to thrive.
And even though the business is tough, restaurants have not stopped opening.
During the summer, husband-and-wife team Liam Browne and Tara Lee Cogan opened The Pump House, a family-run, 70-seater contemporary bar and restaurant in Browne’s hometown of Dunlavin.
“Maybe it’s madness,” says Cogan of the decision, noting that while the couple have considerable business experience, this is their first venture in hospitality.
But, when visiting the town last year, they noted a shortage of places to eat. So, when the site of the Dunlavin Inn, a pub that closed before Covid, became available, they jumped at the chance.
Three months on, “it’s going grand” she says. An early challenge was finding staff – and somewhere for them to live. While the couple have hired younger locals, getting experienced chefs was trickier.
“We’re off the beaten track a bit,” says Cogan, adding that the location can be an issue when interviewing chefs to come and work.
To make this easier, they have just secured a staff apartment in the village.
“It was really hard to get,” she says, but adds, “it’s a bit of a game changer”.
Back in Dublin, Collender is also looking to expand his offering. In February, he’s planning to open Khoka, a casual, cafe-style venture in Killester, north Dublin, “ideally” with lower pricing than Kinara. Offering similar Pakistani and eastern cuisine, he’s hoping for an offering encompassing breakfast, lunch and dinner.
And, while the issue of staff accommodation might have put Macken off one possible venture, he is still upbeat about the sector.
“There are loads of great positives – there is delicious food out there,” he says. So would he get back into the business himself? “I would – but it would have to be the right building in the right place in Dublin”.
Given the challenges, it pays to get creative – and this will often mean getting clever with ingredients.
“My job is to source the best ingredients for the best price,” says Mullins, “Work within the seasons – you do see the best value and get the best flavour”.
To achieve this, Mullins will change the menu four times a year.
“Creativity is the most important part of my job and I get excited when seasons change,” he says.
Staying close to suppliers is also key, and he suggests asking them for advice on what’s good value at the moment.
[ Government to blame for hundreds of food businesses going under, restaurants sayOpens in new window ]
The old staple of using cheaper cuts of meat is an option too. “This is where you do find value,” says Mullins. He also advises making the most of what you’ve already paid for. Breakfast diners at The Marker will have the option of the expected croissants and Danishes, but if these left at the buffet, they won’t go to waste: Mullins says they’re used to create a bread-and-butter pudding, with a Baileys creme anglaise, which is also served at breakfast.
“It’s a small example of lowering food waste, and using everything,” he says.
At The Pump House, Cogan says they are already looking at changing some things, just a few months after opening.
“When you get the customers in, and get feedback, it’s the only way to really know what they want,” says Cogan. “You have to listen to your market.”
It was just that the costs spiralled out of control. It was a hard decision to make, but it was the right decision to make
— Máire Ní Mhaolie
The pitch of The Pump House is high-quality food at affordable prices, but for the younger 18-35 cohort, Cogan is finding that they want lower-cost options. So, the team are now working on a bar menu, which she hopes will be finished by the end of the month. A change in opening hours is also on the cards.
“We were never going to open every day. Given the cost of seven days’ staff and utilities, it wasn’t feasible,” she says.
For now, they’re open for dinner Wednesday to Saturday, and for Sunday lunch. However, they’re thinking of shifting to the bar menu on a Wednesday, with dinner service Thursday to Saturday.
“Wednesday in the summer was fine, but it has dropped a little bit,” says Cogan.
They’re changing their brunch menu too, which is offered on Friday and Saturday.
Another factor in reduced spending in the hospitality sector is restaurants closing earlier in the evenings.
“Since Covid, people don’t stay out as late,” says Collender. But, he says, there could be an opportunity to attract later diners with the opposite of an early bird or pre-theatre menu, by offering incentives for eating after 9.30pm or so.
Diners can also expect to see less on their plates.
“Buying little bit less of a better ingredient is the way to go,” says Mullins – speaking to the home chef as well as someone eating out.
Consider a steak.
“There is always a market for someone wanting a fillet steak,” says Mullins, but he adds that prices have gone up “probably by about 25 per cent”.
Some five or six years ago, you would have paid about €28-€30/kg, but now it’s between €30 and €40/kg.
At Forbes Street at The Marker, an 8oz steaks now costs €54 – beyond the price range of some diners. So, Mullins has introduced a new, smaller dish, a 6oz fillet steak, at a price of €44.
Sometimes, it’s about trying to find value rather than raising costs to add to an experience.
At Forbes Street, home-made sourdough and brown bread is a given for every diner – and they can bring some home too, as Mullins shares his recipe with them.
“Americans love that,” he says. “I’m always trying to add value to the experience”.
For some, however, closing the business is the only option.
When The Yew Tree opened last year, its well delivered, keenly priced menu attracted great praise in this newspaper, although our critic did question how they could pull it off, given the current “vagaries of the restaurant industry”.
Fast forward a year or so, and it’s clear that they couldn’t.
On August 31st, the owners and their staff shared a final farewell drink as they closed the doors on the premises for the last time.
“It was just that the costs spiralled out of control,” says Ní Mhaolie, highlighting a combination of different factors, such as food costs and wages.
“It was a hard decision to make, but it was the right decision to make,” she says.
Could anything in particular have saved the restaurant?
“Not really. At that stage, it was just time to close”.
She had mixed emotions about the closure, but “when the figures speak for themselves, you just have to roll with it”.
“I was a little bit disappointed, but knew it was the right thing to do. I didn’t feel I was a failure, as I’ve been in business so long,” she says. “It happens to the best of us.”
And, she adds, “eight hours’ sleep is better than three or four. I was just up worrying about spreadsheets and margins and bills.”
She’s off on holidays now, and will get back to work upon her return – back to the hospitality industry she loves so much.
There will be a difference, however.
“I absolutely love it – but I’m definitely going to work for someone else next time.”
