Some 70% Of Irish Restaurants Saw A Decline In Profitability In 2023

Only 14% of Irish restaurants managed to increase profitability in 2023, compared to the 70% that saw a decline – the highest proportion of any tourism sector to announce this, according to Fáilte Ireland. The Fáilte Ireland Tourism Barometer showed that 42% of restaurants were up on customers in 2023, compared to 2022, and 38% were down.

 

The research shows that the food-and-drink sector is affected particularly adversely, with 80% of respondents citing ‘rising payroll costs’, 74% citing ‘rising costs besides energy or payroll’, and 71% citing ‘rising energy costs’ as concerns.

 

‘Urgent Message’

Last month, Paul Lenehan, president of the Restaurants Association of Ireland (RAI), released an “urgent message” to the government, encouraging it to do the “right thing” for local restaurants and cafes.

 

“The rising costs we are incurring through wage inflation, food costs, [and] energy costs are out of control, and everything, including the 4.5% added to the VAT rate in the last Budget, has made our businesses completely unviable,” said Lenehan. “Our cash flow is at an all-time low. Our VAT returns made only for November and December have proved that to everybody. Our businesses are simply not viable.”

 

Pubs And Bars

Meanwhile, 50% of pubs and bars were up on customers in 2023. This compares to the 31% reporting trade to be down, according to the Tourism Barometer.

 

However, profitability in 2023 was the other way round, with 37% reporting it to be up, but 46% noted that it was down.

 

The research shows that 25% of pubs and bars expect customer numbers to be up this year, but 44% noted that they are facing a decline.

 

‘Election Year’

Earlier this month, the Licensed Vintners’ Association (LVA) announced plans to make the restoration of the 9% VAT rate for food an issue in the run-up to the local and European elections this summer.

 

“We hope this will help focus minds and that the government will take action on the VAT rate before more food-led businesses go to the wall,” said Donall O’Keeffe, CEO of the LVA. “The industry is crying out for this issue to be addressed, and the politicians would be wise to reflect on that matter in an election year, and with a general election also on the horizon.”

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