There is only so much you can charge “for soup or a sandwich or salad”, according to David Dunne, owner of Knox restaurant in Sligo which, after “a perfect storm”, has closed for the winter.
Dunne was one of several restaurateurs who had to either temporarily or fully close down their business due to rising energy costs, reduced consumer spending and a lack of suitable staff.
Dunne, who worked in financial services for 15 years before doing a 12-week course in Ballymaloe, says soaring energy costs, the steep rise in food costs and staff shortages have all combined to make it “a horrible environment at the moment”.
With restaurants working on “a tight margin” and while some increased costs led to price rises for customers, options were limited, he said, especially during the day, as people will only pay so much for a soup or a sandwich.
“People think Covid was the worst, but it really wasn’t because you had the government assistance,” said the former banker, who added that by adapting – first with a takeaway menu, and then outdoor dining – they had gotten through the worst of the pandemic.
But when things got back to “normal”, he discovered that normal was different now, apart altogether from soaring costs, which have made many businesses unviable anyway.
I think the day is gone when people go out for a big meal at night. I think they go more for the tapas thing— Peggy Cooke, Cooke's of Galway
Continued remote working, for example, took a large chunk of his lunchtime business.
“And the guys who might have met up [in Knox] in the mornings were slow to come back because they had got out of the habit,” said the Rosses Point native.
“We had a lot of teams coming in on a Thursday or Friday for lunch, and where offices are still operating on a hybrid scheme, they are not necessarily back together.”
Adrian Cummins, chief executive of the Restaurants Association of Ireland, said they had seen an increase in the level of closures in September and October but that while the numbers had dipped in November, there was a feeling that some businesses were trying to “hang on until after Christmas”.
“We have had anecdotal evidence that in January and February we will see more restaurants forced to close down,” he said.
“I do feel that the last time I got the same sense of how we were heading into economic difficulties was in 2012 – the recession. It is panning out exactly the same.”
Cummins said there needs to be a bespoke emergency package to help hospitality and also possibly retail.
“If you have a cooker, freezer or fridge, you are going to be in trouble with your energy costs.”
Margaret (Peggy) Cooke, who recently closed her Galway restaurant after 22 years in what was a landmark listed city centre venue, noted that as well as soaring costs, the sector is being affected by changing trends. Cooke’s, on Upper Abbeygate Street, closed at the end of October.
“There is a lot of street food now. I know that is popular with young people,” said the Galway woman, who says older people too no longer relish a heavy meal late at night.
“I think the day is gone when people go out for a big meal at night. I think they go more for the tapas thing. They just want bits and pieces. They don’t want a full steak.”
Another change post-Covid was that people started coming out earlier.
“The clientele we have used to always come in at 8pm, but everyone started coming in at 6pm and they would be gone by 8pm or 8.30pm. Now they are going out early when they feel hungry, they have their dinner and they go home.”
In a small provincial town I would not dream of opening up in January or February. I will certainly be waiting until the season kicks in— David Dunne, Knox restaurant
The key factor which forced her to take stock was the hike in her electricity bill, which doubled in recent months. The impact of Covid, increased food costs and staff shortages were also factors.
“Chefs are like hen’s teeth. And we couldn’t even get front-of-house staff. It has been very hard, very stressful when you are wondering ‘will the chef turn up tonight’.”
Dunne in Sligo pointed out that for restaurants crippled with huge electricity bills, reduced opening hours are not much help.
“The fridges and freezers are there, no matter if you are open five days or seven days.
“Funnily enough, even though I have closed, my bill was €700 last month – and I have nearly turned everything off.”
With the Restaurants Association of Ireland recently estimating that one restaurant was shutting down each day amid “off-the-charts” energy costs, Dunne agrees this was the main factor in his decision to pull down the shutters on his outlet on Sligo’s main street for about six months.
The electricity bills in Knox had increased by a factor of two and a half, while some foodstuffs had doubled in price, with many products up from 30 to 40 per cent.
When he does reopen, he says he will have to be more efficient. “We hope to adapt – to keep it more efficient, from a labour point of view and we will also look at the hours, so there is not wasted hours. There is no point in being open on a Monday in Sligo town.
“In a small provincial town I would not dream of opening up in January or February. I will certainly be waiting until the season kicks in, probably March or April, but it will be a remodel,” said Dunne, who is also a 50 per cent partner in Flipside, another Sligo restaurant.
But he too is aware that habits are changing. “People do like to eat earlier now. We have certainly seen that in Flipside, where probably our busiest time is between 5pm and 7pm.
And while he knows people expect quality when they go out for a meal, “I think people are looking for something casual at night, something where you don’t have to dress up.”
Both Sligo and Galway restaurants reported that a slower-than-expected tourist trade had affected their bottom line this year.
“It wasn’t the best of summers in Sligo from a tourist point of view,” said Dunne. “I think we can do more in terms of promotion.”
Cooke said the tourists came late to Galway, as people were wary of travelling, even when restrictions had eased.
“It only got busy in August. It used to start in April and you’d get tourists through May, June and July.
“But a lot of the tourists are not great spenders. The Irish are better spenders. They are the best really.”