There has to be something fundamentally wrong - restaurant closure

[Terroror]

A restaurant we go to quite often is about to closing after two decades in business.

It’s popular, booked out all the time. In fact, I understand it’s had the busiest Christmas period in its history.

Its closing because the business is no longer sustainable to due to rising costs. Not lack of custom - it’s very busy - but energy costs, rates, staffing costs.

A much loved business down the pan.

There really is something fundamentally wrong when experienced restauranteurs with a busy restaurant can’t make this work.

I don’t see much concern from the government.

AIBU?

Not saying governments should stop restaurants closing, but it is entirely consistent with a capitalist economy for a government to regulate how it runs. Unless you espouse unfettered, laissez faire capitalism, of course.

I think Clinton's have near enough disappeared. There used to be loads of them. But Moonpig etc and stuff I think put paid to them. And supermarkets and online you can get really cheap cards.

Why is everything "the governments" responsiblity ?

And to sound very harsh, businesses I don't use going out of business is not necessarily my main priority in life.

The UK wanted to be poorer. Got it's wish. And now people are upset.

Happening in every sector across the country

staffing costs have gone through the roof along with the cost of everything else

Look what's happening to Veeraswarmy - London's oldest Indian Restaurant, Michelin *, hugely popular (v expensive) - Crown Estates are 'redeveloping' the building in Regent Street.

Likewise the much more affordable, also hugely popular India Club on the strand closed after 50 years because the building owners were 'redeveloping' (a modern hotel) .

It's most likely the Landlords and lease. What they get out of having empty premises rather than occupied ones I have no idea. I have friends in the trade who come to the end of a lease and landlords see a business and think they put the rent up by 50%. As many of my friends say, there's no point in working for free. Or so little you'd be better off working at someone else's gaff.

There are always comments on a local Facebook page saying the council rents on business premises are too high. They aren't owned by the council though they are owned by private landlords. Neither the council or Central government are involved.

Oh dear. We have plenty of empty retail/restaurant units in our town centre and I expect that will increase, then.

I'll tell you what the government do control - minimum wage, and employers' National Insurance contributions.

I don't want to see lower wages and an increased reliance on Universal Credit to top them up.

This is a really interesting thread. As a huge fan of pubs and restaurants, I don't want to see them closing down, but they are vanishing from the town I live in, with only the large chains surviving.

It's hard to see what the solution is. People don't have nearly as much disposable income as they did pre-pandemic and pre-Brexit, so can't afford expensive meals out. Dinner in Pizzaland for four people is well over £100 now. Places I used to think of as 'cheap' are not cheap any more. There aren't enough people in the workforce so wages have had to go up, but at the same time, bills have gone up even more so disposable income remains squeezed.

Business rates reduction would be a good idea, but this never seems to happen - not entirely sure why. It's far cheaper to run an online business than anything involving bricks and mortar, which suggests that takeaway/delivery places will survive but restaurants will gradually disappear. Apart from Taco Bell, Auntie Annies, and all the fast food places - perhaps.

When those jobs disappear entirely, as the pub or restaurant shuts, you'll be paying Universal Credit for the whole amount, not just topping it up.

They needed to charge more.

I'd rather see lower commercial rents and lower business rates than a reduction in the minimum wage.

TBF it's not a zero sum game. Those people can and probably will find other jobs. This might just be a recalibration of how we currently understand hospitality as an industry.

'Government policies on NI '

So do you think the NHS was left in an acceptable state by the previous government!

Pretty much this.

The contraction we're seeing now is a correction. The bubble has burst.

Or a dependence on tips like America. Workers should expect a fair wage.

The govt continues to rip society and economy to shreds. It’s not even really relevant whether it’s lab/con - they’ve both been on a mission of destruction my entire adult life.

So many businesses can't afford the rent/lease on buildings owned by investment companies. I have 2 friends that have leased shops on our High Street, both are closing due to ridiculous rent increases. one going from £180 in 2019 to £475 today. Just pure greed by investment companies.

Recently I know of a VERY popular butchers closing. It was full every day. But the family running it had had enough of it taking over their life and none of the grown up kids wanted to take over.

(not in UK)
Our village bakery closed down a few years ago because the younger family members didn't want to take over. You can only really sell these things as a family business, because you have to rely on the family working in the business for less than NMW. It isn't sustainable (we bake all our own bread now, it is fine but i do miss their lovely bread and cakes)

Same for a lot of restaurants and other small businesses: the kids are working in there around school and at weekends, etc, and that is the only way they stay viable.

PP talking as though the rise in NMW meaning staff are "too expensive" is a bad thing - it isn't for staff. The restaurant business is hard work, and they deserve all they can get.

Pre-Covid the restaurant business was already having huge problems. Many of the big names (michelin starred or not) were already reducing their opening days to Thursday - Sunday. Additionally many were stopping the split shift model and either sticking to Lunchtimes-Early evening or evening only.

If we want to follow the complete capitalist model, we have to say the market will regulate itself. But - there is a reason all these places are being "redeveloped" and i cannot work it out except as a tax-efficient way to invest or park your capital. Because all i see (UK, France, Germany... whereever i have been over the last few years) are newly redeveloped office blocks that are completely empty. Or my local town that built a beautiful, totally unnecessary, middle of town shopping arcade (really beautiful) which wrecked the high street and now the shops in there are closing. Late stage capitalism is a bitch.

Ask Rachel Reeves

what's it got to do with her though? business rates aren't the only issue here.

4 in my town all closed in the last couple of weeks. Some had people's weddings booked.
Saw a news report about this a couple of weeks ago. One guy had had his rates increased by over £100,000 a year....

We have had a low wage economy since the 1980s, it was an underpinning policy of Thatcherism. If we want to move away from a low wage economy, and have people paid a proper wage for a days work, it’s going to be short term pain, for longer term gains.
Zombie businesses, who are barely ticking by, paying NMW, and not generating any real profit, are not good for the economy. The resources that they are using need to be freed up, for Buisness that can pay more, and generate more revenue.
This is not a “one term parliament” problem.. this is a 20 - 30 year piece of work.