Latest news with #AdrianCummins
BreakingNews.ie
01-05-2025
- Business
- BreakingNews.ie
150 restaurants closed in first quarter of 2025 due to business costs, survey shows
The Restaurants Association of Ireland (RAI) unveiled the findings of its Cost of Doing Business 2025 survey, highlighting the mounting financial pressures facing restaurants and hospitality businesses across the country. With over 170 business owners participating, the results offer a sobering snapshot of an industry grappling with rising costs, shrinking margins, and growing uncertainty about the future, RAI said. Advertisement The pressure on the sector continues to result in closures, with 150 restaurants, cafés, gastropubs and food businesses shutting their doors in the first three months of 2025 alone. RAI said these figures underline a deepening crisis and reinforce the urgent need for meaningful support. 65 per cent of respondents reported a decline in financial performance in 2024 compared to the previous year. Business owners identified wage increases and escalating operating costs as the most pressing challenges. The impact of these pressures is already being felt, with many restaurants forced to reduce staff, raise menu prices and seriously question their long-term viability. Advertisement The survey reveals that payroll costs now account for nearly 39 per cent of turnover, a significant increase from just under 32 per cent in 2022. Food costs and wages Food costs have also surged, rising from 28 per cent to over 34 per cent of turnover, while insurance and utility bills have climbed by 32.89 per cent and 25.81 per cent, respectively, over the same period. Employment trends reflect the strain, with full-time staff levels dropping by 10 per cent and part-time roles by seven per cent since 2022. Wage increases between 2022 and 2025 have been particularly steep with minimum wage increasing by over 28 per cent. Meanwhile, menu prices have not kept pace with soaring input costs, increasing by just 16.92 per cent for lunch and 18.75 per cent for dinner. Advertisement The cost of ingredients and energy has also seen dramatic inflation. Between 2022 and 2025, the price of fruit and vegetables rose by nearly 50 per cent, beef by 96 per cent, and chocolate by a staggering 157 per cent, RAI said. At the same time, gas costs increased by over 58 per cent per kilowatt-hour, and electricity by more than 96 per cent. Looking ahead, 94 per cent of businesses expect food costs to continue rising in 2025, while 88 per cent foresee increases in beverage prices. Four in five restaurants anticipate cutting staff hours due to wage inflation and increased costs, while 70 per cent expect to reduce overall staff numbers. Advertisement Commenting on the findings, Restaurants Association of Ireland chief executive, Adrian Cummins, said: "These findings are a glaring red alert for the Government and every politician in the country. The food-led hospitality sector is under relentless financial pressure and the consequences are playing out in real time. "Without immediate and meaningful supports which include cost containment measures I can guarantee the pace of closures and job losses will continue in every town, city and village across Ireland. Ireland Ronald McDonald House for new National Children's... Read More "Restaurants are not just under pressure; they are on the edge. Restoring the nine per cent VAT rate isn't a luxury, it's a lifeline. It's the breathing space businesses need to survive rising wage costs, unaffordable energy bills and extreme food inflation. "Yes, recent Government steps to support business are welcome. But the promise to restore the nine per cent VAT rate, a commitment already made in the Programme for Government must now be honoured and confirmed to give businesses clarity on their futures. Advertisement "We've already seen 150 restaurant and café closures in the first three months of 2025. If this trend continues, we are on course for another catastrophic year of shutdowns and job losses. "When a restaurant or café closes in rural Ireland, it's almost always permanent. These aren't just economic losses; they rip through communities. Our towns are being gutted. Our villages are being hollowed out. We cannot let this continue any longer."
Observer
13-04-2025
- Business
- Observer
Downward trend in insolvencies continues into 2025
Companies in Ireland – in the European Union – are proving resilient with insolvencies falling in the first quarter of the year, continuing a downward trend from last year, according to the latest research by PwC. There were 192 insolvencies in the first quarter, 14pc fewer than in the same period last year. This was also down 7pc on the last quarter of 2024 when there were 207. There were 852 insolvencies in total last year, well below the predictions of up to 1,000 made when Revenue closed the Covid debt warehouse last spring. The rate was almost identical to the pre-pandemic figure of 850 in 2019. The Government had downplayed fears about a record number of companies going to the wall post-pandemic, when many were kept alive by state hand-outs. There was no 'tsunami' of insolvencies after Covid, a senior official in the Department of Enterprise pointed out last May. PwC is calculating the current annual insolvency rate as 29 per 10,000 businesses, well below the long-term average of 50. It says this ratio provides a more accurate picture than absolute numbers, due to the increase in the number of Irish businesses in recent years. The current number of registered companies is 298,101, compared to about 160,000 near the height of the 'Celtic Tiger' (a nickname for Ireland during its boom years with great economic recovery and prosperity from the mid-90s). Insolvencies were 25 in the retail sector in the first quarter, 40pc down on the same period in 2024. Among them was the Irish arm of New Look, which went into liquidation in February. They employed 347 people at 26 outlets nationwide. Hospitality had 43 insolvencies, which was in line with the rates recorded last year, when there were 154 insolvencies in total. 'This consistency suggests the sector is maintaining its current stability despite ongoing economic challenges,' PwC said. 'Our analysis also shows that most of the insolvencies are predominantly small restaurants and cafes.' It pointed out that high-profile closures of restaurants and pubs recorded by the media do not necessarily equate to insolvencies. Some of these businesses are sole traders and do not operate as companies, while others are still in the process of closing down and have not completed the process. The sector is pleased that the government departments and companies are instructing staff to return to offices either full time or more days. Department of Social Protection informed staff they would be required to work from the office a minimum of two days, with senior staff due in for three days at least. Staff in the Department of Finance have also been instructed to work onsite more often, according to the trade union Forsa. 'Restaurants will certainly welcome this,' said Adrian Cummins, chief executive of the Restaurants Association. 'We would love to see it go to full time, but this is definitely a start.' The number of rescue processes in the first quarter of 2025 was consistent with rates last year. There was one examinership and eight uses of the Small Company Administrative Rescue Process (Scarp), a rate that is regarded as an under-utilisation of the scheme which the Government set up during covid as a way of assisting firms in temporary difficulties with creditors. Business recovery partner with PwC Ireland, Ken Tyrrell, said: 'The continued year-on-year decline in insolvencies demonstrates the robustness and resilience of our economy. However, with the prevailing economic uncertainties and geopolitical risks looming, it remains to be seen what the year has in store. He added: 'Nothing is certain and businesses will also need to deal with a higher cost base in 2025 driven by domestic and international factors. I would advise businesses to focus on their core strategies, cost base and actively manage their working capital to ensure that they are financially sustainable into the future.' The writer is our foreign correspondent based in the UK
