‘Everything is going up’: UK hospitality sector struggles as inflation soars | Hospitality industry

“I am wrestling every single day to keep the business up,” said Damian Wawrzyniak, the chef behind the Peterborough gastro pub House of Feasts, who fears he will have to close the restaurant next month after six years.

Wawrzyniak said bills had soared but he could not raise prices to compensate as ordinary people cut non-essentials, including dining out, to cope with the rising cost of living.

The number of diners visiting his restaurant is down by about 40%, while the cost of some ingredients has gone up 40% or more. “The price of cheese has doubled. Oil is [through] the roof. My energy bill is up by 300% and is now nearly the same as the rent,” Wawrzyniak said. “Electricity, gas, BT … Everything is going up, even insurance.”

Wawrzyniak is not alone. Hospitality businesses across the country are facing a squeeze as business costs rise but they find it tricky to pass on the pain to customers also struggling to cope with rocketing prices. Difficulties in finding staff have only added to cost increases.

A wave of closures is expected over the coming months as independents and well-known names, from Mark Hix to D&D London, look at their portfolios.

Hix, who closed his Fox Inn in Dorset on Sunday, wrote on the restaurant’s website: “I don’t need to tell anyone how hard it has been for everyone in the industry since Covid hit, and the challenges simply continue with rising costs and a difficulty to recruit like I have never known in my whole career.”

Des Gunewardena, the chief executive of D&D, said the closure of its Aster restaurant in London after five years of trading was “a sign of the tough times we are in”.

He added: “In the past we would have taken a longer-term view. But given the current acute challenges of inflation and, more importantly, staffing, we felt that we could not justify keeping Aster when other more successful restaurants in the group were crying out for good people.”

Gavin Cox, the chief executive of Famously Proper, which owns the Byron burger chain and the Mother Clucker takeaway specialist, said he had been approached by smaller businesses looking to sell up as they were finding things “really, really challenging”.

Cox added: “There is cost inflation across the board. Cooking oil prices have doubled year on year, electricity had doubled and the price of proteins is up 40%. The underlying inflation rate of 10% really doesn’t show how much businesses are trying to absorb.”

He said the group had been forced to carefully tweak its menus and where it was sourcing ingredients to reduce the need to pass on price rises to customers.

Michael Kovacs of the real estate investors Castleforge, which owns hotels in Bath, Cardiff and Edinburgh and serviced offices around the country, said energy and wage inflation were his two biggest concerns and these would not affect all businesses equally.

He said the company was now having to pay more than 10% more for certain in-demand roles such as baristas and chefs but had mostly been able to pass costs on as its hotels were driven by tourist traffic.

“Most people realise that if you want to go on holiday the costs are up. But those hotels in more marginal locations dependent on business travel are finding customers saying: ‘We could just do a Zoom call.’”