At a cost to the economy of an estimated €288 million, 212 restaurants, cafes and other food businesses have shut down in 2024 alone, a new report has found.
‘The Economic Impact of Restaurant Closures’ report, commissioned by the Restaurants Association of Ireland (RAI), suggests that a restaurant closure can cost the Exchequer up to €1.36 million and involve the direct loss of 22 jobs on average and 13 jobs indirectly.
RTÉ News: Restaurant closures since January may cost economy €288m
A new report published today by the Restaurants Association of Ireland (RAI) this morning estimates that every time a restaurant, café or other food-led business shuts its doors for good, it could result in the… pic.twitter.com/Vtg85dbqrp
— Restaurants Association of Ireland (@RAI_ie) April 16, 2024
It is estimated that two restaurants or other food-led businesses are closing their doors every day, with around 70 shutting down in February alone.
A combination of consumers spending less due to the higher cost of living, increased operating costs, including food and energy, and higher wage costs and interest rates contributed to the closures, the report found.
Government measures are also implicated, with minimum wage hikes, statutory sick pay increase to five days and an increase in employer PSRI contributions all increasing the costs employers in the food-led sector are facing.
Carried out by economist Jim Power, the report estimates that each closure results in the loss of €576,554 in gross wages, as well as €115,310 in payroll taxes to the State.
An additional €105,000 in VAT receipts are also lost each year, as well as €11,874 in commercial rates to local authorities and €4,583 in water charge receipts, the report argues.
The cost of social welfare payments for the workers who’ve been laid off could work out at around €440,000.
The report claims that the sector grew by more than 80% between the first quarter of 2012 and the end of last year, but this has been contested by RAI Chief Executive, Adrian Cummins citing some of the figures given by union officials in recent weeks regarding recent growth, and indicating the number of hotels taken out of general use in recent years among other factors.
Speaking on RTÉ’s Morning Ireland, Mr Cummins said that a return to the 9% VAT rate is essential for restaurants and food businesses to remain viable.
He said the closure of businesses in the sector has knock on effects for employees, the exchequer and other businesses, and that the impact of the closures is being felt in regional and rural Ireland.
Restaurant owner Paul Treyvaud said on X that the industry’s plight is “going to get worse”.
“The amount of places I know that are screwed after last 3-4 months is frightening,” he wrote.
And it’s going to get worse. The amount of places I know that are screwed after last 3-4 months is frightening.
And as always, they couldn’t care less https://t.co/93N5GCqJpO
— Paul Treyvaud (@PaulTreyvaud) April 16, 2024