Currys might soon cost £30 and fish and chips up to £20 as restaurants and takeaways pass on rising energy costs and inflation to their customers, after warnings from pub owners of £20 pints and a steakhouse chain that their dishes could reach £100.
Shale Ahmed, who represents small business owners in Birmingham, asserts that customers will experience “eye-popping price increases” as curry establishments battle to stay afloat in the face of soaring costs.
At the Farm-to-Fork Food Resilience conference, he described the industry as being in a “dark place” and warned that without rapid government assistance, many enterprises will be forced to close.
Mr. Ahmed stated to the BBC, “The sector is in a downward spiral.”
We are extremely, extremely struggling. Especially in light of the most recent price rises, I believe it will not be viable come winter, let alone the next year.
‘Historically, we’ve experienced a staff and skill deficit, and the epidemic didn’t help matters much. The cost of raw materials has also skyrocketed.
He continued, ‘If you priced proportionately, even in Birmingham, where curries are less expensive than in rest of the UK, a curry would have cost between £25 and £30, which is unsustainable.
People will not enter the establishments, and we will have empty restaurants and takeaways.
Following Russia’s invasion of Ukraine, energy costs have at least doubled for the majority of restaurants and takeout, resulting in “crippling” financial losses.
In the previous six months, the battle has pushed up European gas prices by about 400%, resulting in increasing electricity expenses.
And classic British fish and chip restaurants are already warning of an impending extinction.
The combination of a rise in expenses and an increase in the cost of raw materials, such as fish, potatoes, and oil, has put enterprises in a financial quagmire.
David Wilkinson, the proprietor of The Blue Fin restaurant in Skegness, Lincolnshire, stated that he would need to charge £20 for fish and chips to be viable.
Andrew Crooksley, head of the National Federation of Fish Friers and owner of the Skippers of Euxton restaurant in Chorley, Lancashire, stated that he has been forced to accept rising costs.
Martin Williams, CEO of Rare Restaurants, which owns the steakhouse franchise Gaucho, asserts that small and medium-sized enterprises are at risk of failing.
Baker, 55, may close due to a 600% increase in energy costs.
Andrew Chisholm, the owner of Christie the Baker, which operates many shops in Scotland, stated that he is unable to determine day-to-day costs since “everything is increasing so frequently.”
He continued, “We are a really traditional community business.” We rarely implement price increases.
In the past 18 months, we have had no choice but to raise our pricing, despite the fact that we are far cheaper than our competitors because we serve the community.
‘Normally, we do this once a year, but we’ve had to do it three or four times this year.
The prices of our most popular products, pies and breads, have been raised by 30 percent. I cannot perform a day-to-day cost analysis because prices are rising so frequently.
Because we are a bakery, we consume a great deal of electricity; our ovens are on 24 hours a day.
“There has been a tremendous growth. Everyone is doomed. We require assistance to continue operational, as do all businesses.
If nothing is done, in six months we will not be here. My electric bill has increased by 200 percent, and my gas bill has increased by 600 percent. It is a desperate situation.
However, he has no choice but to swallow the loss, as customers will abandon him if he raises prices.
Mr. Wilkinson told MailOnline, ‘There is a limit to what consumers are willing to spend, so we must maintain the lowest costs feasible. To remain profitable, we would want to charge £20 for fish and chips – numerous establishments throughout the country already are.
“The majority of stores around here are priced same. We do not wish to close, but at this rate, it may be necessary. Last year, I was paying approximately £300 per month for energy, but my most recent bill was over £1,000 and is expected to increase.
If we do not receive assistance, we will be forced to close. We are all finding it hard.’
Andrew Crooksley, president of the National Federation of Fish Friers and proprietor of the Skippers of Euxton restaurant in Chorley, Lancashire, stated that fish and chip restaurants were forced to bear rising prices.
He stated, “This is a really anxious period for everyone.” Due to growing energy expenses, I must now charge £15 to maintain the same level as at the beginning of the year. We are having to accept it because people will undercut you.
“My greatest concern is the question of why anyone would want to manage a business at this time.” There will be a departure of small business owners. I am currently spending eight times more for energy. Those levels will kill a business.
And you cannot sell your business since nobody will be interested in purchasing it. Additionally, we are uniquely impacted by the [Russia-Ukraine] conflict.
“I adore this field. Everyone is very enthusiastic about it. However, we need immediate assistance and a long-term plan to get us through the next decade.’
It follows a warning from the CEO of Argentinian steakhouse chain Gaucho that restaurants would charge $100 for a steak if they passed on their rising energy costs to customers.
Martin Williams, the CEO of Rare Restaurants, which owns Gaucho, asserts that small and medium-sized businesses (SMEs) in the United Kingdom are in danger of failing.
Mr. Williams stated to The Telegraph, “At Rare Restaurants, we have fixed our energy costs.” Had we not, the impact of growing costs across our 22 restaurants would have reduced our profits by £3.5 million.
“To preserve margins, steaks would have to cost over £100 if they were to be tripled in price,”
Without a reduction in energy costs, the restaurant industry as a whole will be unable to open, and many SMBs will regretfully fail.
In the meantime, a once-Michelin-starred restaurant in a wealthy cathedral city is closing due to its own rising energy costs.
Chef Phil Storey and publican David Nicholson are shown in front of the former Michelin-starred Black Rat restaurant in Winchester, Hampshire.
The owner of various bakeries in Scotland, Andrew Chisholm, stated that he can no longer calculate day-to-day costs since ‘everything is increasing so frequently.’
David Nicholson, proprietor of the popular Black Rat in Winchester, Hampshire, reports that his annual energy expenditures have skyrocketed from £20,000 to £100,000.
The restaurateur, who held a Michelin star for more than a decade before losing it during the epidemic, stated that rising prices have rendered the restaurant industry unprofitable.
Mr. Nicholson, who launched the restaurant in 2007, stated that rising energy costs are the primary cause for its closure.
The price will increase from $20,000 to between $80,000 and $100,000.
“There are also issues with staffing, including front-of-house personnel and cooks. Both wages and food prices have skyrocketed.
We never intended to generate a large profit, but we also never intended to incur a loss. It was becoming an unprofitable enterprise. Winter will not be a pleasant time for many.
The expenses at The Black Rat were the greatest of all my companies.
Pubs across the United Kingdom currently fear that they may have to raise the price of a pint to £20 or close their doors this winter.
James Allcock, 36, had invested his life savings in the Pig & Whistle café in Beverley, East Riding of Yorkshire, but he now warns that ‘out of control’ inflation and energy costs are’strangling’ small businesses like his.
According to the cheapest figure he has received, he would now pay more than £22,000 on energy, whereas his previous annual power and gas bill was $2,900.
Mr. Allcock noted that the estimated amount is now greater than his rent and will be his third greatest expense after VAT and salary.
He told Sky News: ‘I’ve just found out it will cost £125-a-day just to turn the heating on in winter. This will turn a little profit-making day into a day with enormous losses.
I feel like the band on the Titanic, or like I’m rearranging the deck chairs to prevent the ship from sinking.
Bakers have also been affected by rising costs, with one baker disclosing that his energy costs have increased by 600 percent.
Andrew Chisholm, the owner of Christie the Baker, which operates many shops in Scotland, stated that he is unable to determine day-to-day costs since “everything is increasing so frequently.”
He stated that our company is very traditional in the community. We rarely implement price increases. In the past 18 months, we have had little choice but to increase our pricing, despite the fact that we are far less expensive because we serve the community.
Today, Prime Minister Liz Truss will outline a package of assistance for firms on the verge of collapse due to skyrocketing energy bills.
‘Normally, we do this once a year, but we’ve had to do it three or four times this year.
The prices of our most popular goods, pies and breads, have been raised by 30 percent. I cannot perform a day-to-day cost analysis because prices are rising so frequently. As a bakery, we utilize a great deal of energy; our ovens are on 24 hours a day.
“There has been a tremendous growth. Everyone is doomed. We require assistance to continue operational, as do all businesses.
If nothing is done, in six months we will not be here. My electric bill has increased by 200 percent, and my gas bill has increased by 600 percent. It is a desperate situation.
Liz Truss is already facing a make-or-break moment in her premiership today as she presents a £150 billion proposal to freeze energy rates, which has prompted these anxieties.
Today in the House of Commons, the Prime Minister will pledge to keep household prices at £2,500 per year until 2024 – less than half the level many feared they would reach. Including other support most individuals should experience little change from their bills.
Ms. Truss will concede that the scope of the intervention is comparable to the response to Covid, insisting that the alternative is to do nothing and allow the economy to suffer tremendous damage.
To ensure the country is ‘never in this position again,’ she will also proclaim that the fracking prohibition must be lifted and oil and gas exploration in the North Sea must enter a new age.
The action will alleviate the uncertainty affecting millions of households. The freeze is expected to last at least 18 months and could cost taxpayers up to $150 billion, which is more than double the price of the furlough program.
In addition, there will be a package of assistance for businesses facing disaster owing to skyrocketing energy bills. The specifics are not yet known, although the duration is expected to be shorter.
What is Truss’s plan to save the energy industry, how much will it cost, and how will it be paid for? Your questions answered
According to Jason Groves for the Daily Mail
What plans does Liz Truss have?
Britain’s new Prime Minister will announce a freeze on average energy bills of around £2,500. The freeze is more than £1,000 less than the latest energy cap of £3,549, which will be implemented in October. In addition, households will continue to receive a £400 rebate, as announced in the summer. According to Chancellor Kwasi Kwarteng, the support package is likely to be required “this winter and next,” indicating that it will be necessary for at least 18 months.
How will it function?
Ministers will sign contracts with energy companies forcing them to provide fuel to residential consumers at a fixed price. Then, the taxpayer will cover the difference between the fixed price and the market price.
Will firms get support?
Yes. Yesterday, the prime minister pledged to assist businesses with growing costs, stating that firms will receive assistance with the “acute price issue” this winter. Examining ideas to fix the unit cost of electricity sold to businesses, ministers. According to reports, however, the issue is “complicated,” and the complete package may not be finalized until the next week.
What will the cost be?
Cost estimates vary significantly and are dependent on the wholesale price of energy. A Whitehall source estimated that 100 billion pounds would be the ‘high end’ of costs, although ministers concede in private that it may cost 150 billion pounds or perhaps more if gas prices continue to rise.
How will it be financed?
The enormous expense will be covered by general taxation. Yesterday, Miss Truss ruled out extending the new windfall tax on energy companies, citing the potential impact on future supply investments.
Will it lessen the chance of blackouts?
No. Experts have cautioned that the strategy could increase the likelihood of winter power shortages since users will have less incentive to reduce consumption. With other European countries considering price freezes and Russia threatening to further reduce supplies, there is a rising danger of blackouts if wind turbines cannot perform due to still weather conditions.
What is the long-term plan of action?
In an effort to reduce Britain’s reliance on global markets, the Prime Minister will also announce measures to “radically” expand local energy sources. This will entail a rush to extract gas and oil from the North Sea, as well as a fresh push to construct more nuclear power plants. Miss Truss is also anticipated to ease the restriction on hydraulic fracturing, which could unlock vast new gas supplies if communities are convinced to embrace the contentious process.
Will local communities be forced to participate in hydraulic fracturing?
The controversial practice of fracking was suspended in 2019 due to worries about earthquakes. However, the industry maintains that it is safe, and a recent technical assessment for ministers – which has not yet been published – is thought to have opened the door to its resuming as long as environmental safeguards are implemented. Miss Truss and the new Business Secretary, Jacob Rees-Mogg, are receptive to corporate proposals to loosen the technique’s stringent planning constraints. In regions where shale gas is extracted, fracking companies also promise to offer residents discounts of up to 25 percent on their energy costs.