Chefs and restaurant owners 'at crisis point' as they call for more hospitality help

ITV Granada Reports Correspondent Victoria Grimes met with restaurant owners who say they are at crisis point, for a special report.

Chefs and restaurant owners across the North West who say the hospitality industry is at crisis point are calling on the Government to do more to help their businesses.

In an exclusive report, some of the region's most high profile chefs have told Granada Reports they feel they are fighting a battle on many fronts.

The cost of produce is pushing many businesses to the limit, with some products costing three-times the price they were the previous year.

VAT rates remain at 20% for hospitality businesses - those within the industry want to see it halved.

And rising energy costs are also playing their part, along with a rise in the minimum wage and the cost of living crisis.

At Spanish restaurant Lunya in Liverpool, owner Peter Kinsella says his energy costs have gone through the roof: "A few years ago I was paying £57,000 a year for energy, now it's closer to £250,000.

"It's a massive price increase - that's pretty much four and a half times what we used to spend."

In the kitchen, Peter Kinsella explains how Virgin Olive Oil has risen in price. Credit: Granada Reports

Peter has been running Lunya for 14 years. He says 2023 is his worst year yet.

"This is the toughest year we've ever experienced," he says. "Tougher than the last financial crash, the post-Brexit impact and even the Covid-19 Lockdown.

"Three years ago, we were paying around £19 for five litres of olive oil. Now, it costs around £57.

"It is a calamity of cost increases. We have just had a record year for turnover for 2023, around £2.8 million but we didn't make a penny - we actually lost slightly last year.

"We are getting close to life support, but we're not on life support just yet."

Peter is managing to hang on but other businesses in the industry have had to call time.

Penny Lynch has had to close her deli business and has spent the last week packing up. Credit: Granada Reports

Soaring costs have also forced Penny Lynch to close her takeaway and deli, A Taste of Honey in Didsbury, south Manchester, after trying everything she could to save it.

She said: "I feel like I've done all my crying now. I think my crying sort of peaked on Saturday when I closed.

"I sold my house and put the money in to clear debts. Then I thought we could do a meal deal that would compete with the supermarkets and I spent a lot of money doing that, but I couldn't compete with those big businesses.

"I didn't expect to have to close so soon but it did just get to a point where I needed to stop."

It is not only small businesses like Penny's that just cannot carry on.

Paul Askew owns The Art School restaurant in Liverpool and is joint Chair of the Royal Academy of Culinary Arts North.

He joined Granada Reports presenters Lucy Meacock and Gamal Fahnbulleh in studio to discuss issues facing the hospitality industry.

In January, celebrity chef Simon Rimmer said there is a "crisis in hospitality" after he was forced to close his successful restaurant in Manchester due to spiralling costs.

Greens in Didsbury had been a favourite with local people for 33 years.

Simon Rimmer has closed Greens after 33 years

The popular dining spot opened in the centre of West Didsbury in 1990, but on 2 January a statement on its website titled "Our hearts are broken" announced its closure.

Simon said the closure is "heartbreaking", because the restaurant is "still busy, it just can't make enough money, or any money, really."

The chef said his job as a presenter on Channel 4's Sunday Brunch each week brought customers through the doors.

He said: "If Greens is having to close, then what are the chances for many other small hospitality businesses?"

Simon is now calling for a VAT break, telling Good Morning Britain: "A VAT cut would really help, paying VAT on food and VAT on employee's a lot."

Simon Wood Credit: Granada Reports

It is a move Masterchef winner and owner of Wood restaurant in Manchester, Simon Wood, agrees would help. He says that 20% VAT is crippling some hospitality businesses:

"26 countries in Europe are on a lower VAT rate than we are," he said. "We're asking for a decrease to 10% or 12%, just to give us a chance.

"It's not a handout - we're just asking for a little bit of respite while we find ourselves in a situation that we just can't control."

Chefs and restauranteurs are now uniting to call on the government to step in, and ensure an industry that brings millions of pounds to the economy survives.

Celebrity chef Gary Usher runs six restaurants across the North West, including Burnt Truffle in Heswall, Wirral and Sticky Walnut in Hoole, Chester, all are part of the Elite Bistros Group.

He also runs The White Horse pub in Churton near Chester, which was recently named in the top 100 Gastropubs in the UK.

He said: "We have the same problem if we are busy or quiet because the costs are too high around what we do.

"It's not about people coming, it's about the costs around us not matching up."

"It is important to keep talking about the issues we are facing.

"It's scary to think of 2024 ahead without some kind of help."

Want a quick and expert briefing on the biggest news stories? Listen to our latest podcasts to find out What You Need To Know...