The hospitality chief behind the Gaucho steak restaurants has said his venues would have had to charge beyond £100 for steaks in order to cover energy costs if they were not fixed.
Restaurant bosses have urged the new Prime Minister Liz Truss to issue emergency support for the sector as some venues grapple with bill increases of up to 400 per cent this winter.
Martin Williams, the CEO of brands M Restaurants and Gaucho, has said sky-rocketing energy bills risk closure for many “independent restaurateurs, startups and founders.”
Williams’ Rare Restaurants business has fixed energy prices across 22 venues but would have otherwise suffered a £3.5m hit to profitability, he said.
“To maintain margins this would mean steaks would have to triple in prices to beyond £100,” the Gaucho boss added.
“Food and wage inflation, plus ridiculous [tax] rates have already wiped practically all profitability out of our sector – now energy costs will simply mean closure for many SME’s – unless the government steps in,” Williams explained.
Industry leaders have called on ministers to introduce a support package with measures including tax relief on VAT and business rates and introducing an energy price cap for businesses as there is for households.
The British Institute of Innkeeping (BII) has said the majority of its members were experiencing a minimum 300 per cent increase in energy costs, all while venues attempt to recover from the side effects of the Covid-19 pandemic.
Pubs are facing heftier operational costs and staff shortages while punters are tightening their purse strings amid historic levels of inflation.
An avalanche of cost increases has left “many long-standing, successful pubs simply unviable,” according to the BII’s chief executive officer Steve Alton.
The trade body has also called for a full cancellation of business rates for 2023/2024, as well as a root and branch reform of the system to rebalance taxes with the digital economy.
What’s more, the BII’s letter called for a significant draught beer and cider duty cut for pubs, 20 per cent reduction for a minimum container size of 20 litres.