TOM KERRIDGE: Skyrocketing energy bills spell disaster for restaurants and cafes

Like anyone with a fixed energy deal about to end, these are scary times. But as a restaurateur (or any business owner, really), things seem apocalyptic right now.

This is because, unlike domestic customers, there is no price cap on what businesses can be charged for gas and electricity – and so disaster is brewing.

The latest quote I received for one of my restaurants shows a staggering 600 percent increase. This will increase my current annual energy bill for this restaurant alone from £60,000 to £420,000.

My remaining five restaurants need to do a lot more work before their fixed prices expire or I would be facing bankruptcy.

Things have been tough enough already – these energy increases come on top of already escalating supply chain costs and at a time when hospitality is still working its way back to profitability post-Covid.

The buzz around eating out is back, but how long are people now worrying about how they’ll be able to afford to turn on their own ovens, let alone pay someone else to cook for them?

My current energy contract ends at the end of this year so I have a few months left to shop around. Although, while I am praying that this number will drop in time for me, there is every chance that it will increase even more. So what should I do?

Am I signing up to an exorbitant deal knowing that eventually the lights will go out because it will literally become impossible to pay to keep them on?

Or do I wait, clinging to the hope that prices will fall or that the right help will come in time to give me and my industry a chance for survival?

I’m not a gambler, but right now I feel like I’ve walked into a bookie and started betting on horses, even though I know nothing about horse racing.

What is certain, however, is that this level of increase will be the death knell for anyone involved in hospitality – whether they run a high-end restaurant like mine or a street corner coffee shop.

Local pubs, cafes and sandwich shops, places we all know as the beating hearts of our communities, won’t be facing bills heading towards half a million pounds a year – but their costs will rise proportionately to astronomical levels. Imagine running a small independent country pub where you live above the shop and don’t have much lunchtime trade, but make enough profit from loyal locals to make a living wage.

If your energy bill suddenly increases by 500, 600 or 700 percent, you will have no choice but to close your doors – it will be another lost community center with little hope of ever reopening.

We don’t give up in this business. The fact that we still have a hospitality industry after the challenges of Covid proves this.

I know that many businesses will – just like households – look for ways to reduce their energy use in the desperate hope that they can stay afloat. But frankly, that’s pointless. In hospitality, your options are limited.

Your refrigerators and freezers must run 24 hours a day; your stove may turn on at 7am and not turn off until around midnight.

It’s not like cooking at home where you can switch to using a slow cooker instead of an oven and tell everyone to put a jumper on so you don’t have to heat the dining room.

The only other option for people will be closure – hopefully only temporarily.

But in many cases it will be permanent.

We need the next Prime Minister to step up and take our impossible situation seriously, and then come up with acceptable solutions.

Having an energy price cap combined with a cut in VAT might give us a fighting chance to hang on to our business.

Because, make no mistake, if nothing is done to help us, hospitality will die.

And with it will go every job we create and every point of social contact that this country’s pubs, restaurants, cafes and pizzerias provide. This cannot be allowed.

Latest pub orders? 2 of 3 “can close without help with bills”

By Sean Poulter, Consumer Affairs Editor

Up to two-thirds of pubs could close this winter unless help is urgently given to tackle rising energy costs, a business chief warned yesterday.

Small businesses – unlike households – have no cap on their energy bills and many are hit with huge increases, in some cases eight times higher.

It affects businesses across the street, while schools, nursing homes, hospitals and other vital public services also face crippling huge bills.

Ruby McGregor-Smith, head of the British Chambers of Commerce (BCC), warned: “We are currently talking about up to two thirds of pubs may have to close their doors.

“We cannot be in a situation where more and more businesses are closing because of costs that are absolutely out of their control.” They cannot get support in any other way, it is not like borrowing the money. Baroness McGregor-Smith continued: “They came out of Covid. They already have loans. They already have higher costs than National Insurance. There is no VAT reduction yet.

“They definitely have to deal with the rising cost of inflation as well… It’s too much, they have to have support now.”

TV chef and two Michelin star winner Tom Kerridge has shed light on the crisis in the hospitality industry, saying energy bills at one of his pubs have risen from £60,000 a year to £420,000.

He said many people consider “freezing” their businesses during the winter because they can’t afford to stay open. “The numbers are so ridiculous and absurd that it’s no wonder so many businesses are closing and talking about closing,” he said.

The BCC predicts that the UK will be in recession before the end of the year. Baroness McGregor-Smith, a Conservative peer, told the BBC Radio 4 program today that measures proposed by Chancellor Nadhim Zahawi, including cuts in VAT and business rates for retail and hospitality, were the “right territory” to help people this winter.

But she said: “I think if there is no immediate support, we will see a lot of businesses closing their doors this winter.”

Her warning came as craft brewing company Brewdog said it was closing six stores – in London, Motherwell near Glasgow, Aberdeen and Peterhead in Aberdeenshire – amid a spike in energy bills which meant they were no longer financially viable .