Hard Choices Ahead For Many Hospitality Businesses

Following on from our last blog where we looked at how, despite the impending increases in the National Minimum Wage and employers NI contributions, many businesses have taken on more staff, today we see that there are undoubtedly some hard decisions ahead for owners in the hospitality sector.

We look at one particular business who are looking at making some savings, such as closing for a day or so a week, or reducing the hours on the days they are open.

Covid, Soaring Prices For Energy & Raw Materials

Lesley McCaughan and her husband Mark have run Follow Coffee in Ballymena and Follow Coast in Portrush for around 5 years now, so as you can appreciate they have had rather a rough ride, what with Covid and soaring prices for energy and raw materials. Here is what they said about their situation, as copied from an article on the Belfast Live website.

Mary explained:

“The hardest thing for me is our Portrush site. It’s so seasonal, so I really need to make as much money as possible during the busy periods over the summer, Easter, Halloween – whenever kids are off school.

“I opened every single day, but this year unfortunately I’ve made the decision to close two days a week due to rising costs. I always knew I was going to run at a loss on the days where it was quieter, and I was able to sustain that because of the summer and the seasonal rush, but now the costs have got so far into that.

“We get a lot of locals visiting and it’s important to me they don’t think I’m just there for the tourists because that can happen in the North Coast area, where businesses close during the off-peak to get the tourist trade and then the local people won’t come to you. I’ve built up a lot of regulars in the Portrush area, so it’s really important for me to try to sustain that.

“But the only thing I can do now at this point is close two days a week, and with that it means I save the jobs I have because I can manage it on the staff that I have without recruiting and then I’m not guaranteeing someone hours I don’t know I’ll have.”

I Don’t Want To Lose The Customers I Have

She certainly doesn’t want to pass the increasing costs onto her customers, as she says:

“I don’t want to lose the customers I have, so you’re very conscious of any price increases that you have to make because you don’t want them to go somewhere else or you don’t want them to not come out for coffee,” Lesley said.

“You’re having to really take all of those factors into consideration when you’re looking at your menu, and sometimes it’s a case of that you’re having to take the heat rather than put it back on the customer.

“It’s challenging, but when you start looking at whether to close an hour earlier, for example, then saving the electric costs and staffing costs. But as cheesy as it sounds, I have a real community of people that come into this place not just for coffee, but to see us and for the craic.

“I have a lot of customers that come in for a wee bit of craic and then 4 o’clock after work, they come down for a coffee and they maybe stay till after 5 because they’re loving the chat. And I’m like, well, what happens to those people if we were forced to close earlier?

“We’ve created a community, we have people coming in here telling us about the promotion they got, they come in to tell us they’re moving house or about their new baby, and you know, we want to be there for people. I don’t want to close at 4 o’clock to disappoint those people, but that’s the kind of the decisions now that I have to make.

“I’m analysing that every day, what are we doing between 4 and 5, are we doing enough to keep the doors open or do we open later in the morning.”

She also goes on to talk about the staff that rely on her to pay their wages and keep them in employment, and also the fact that, because the Republic of Ireland have a VAT rate of 9% and NI a rate of 20% they can obviously produce goods and services cheaper. All good points, let us hope the powers that be are taking heed!