Energy costs accounting for a third of restaurant bills

16 February 2023 by
Energy costs accounting for a third of restaurant bills

A third (33%) of a diner's restaurant bill is going towards paying the venue's energy costs, according to research from comparison service Uswitch for Business.

Energy bills (63%) topped a long list of concerns in a survey of restaurateurs across the UK, followed by rent costs (30%), retaining customers (27%) and product inflation (26%). Thirty per cent said their restaurant was operating at a lower capacity than this time last year, with an average capacity of 60%.

In response to rising energy bills, restaurants were being proactive in making changes, with some cutting down the menu (16%), reducing portion sizes (13%) and introducing dishes to the menu that require less energy to create (14%). Ten per cent said they were moving the menu away from meat dishes to more cost effective ingredients.

Despite efforts to reduce consumption, restaurants are still facing challenges to keep their energy costs under control, with 20% of restaurants raising prices to keep up with bills.

And if costs continue to rise, restaurateurs said they risked not being able to pay bills on time (21%), needing to downsize (19%) or make staff redundant (18%). Seventy-one per cent said they expected costs to continue to rise this year.

The data also found that 31% were training staff in energy efficiency measures and restricting the use of air conditioning and heating (31%, and 22% had resorted to closing the business during quieter times of the week.

Jack Arthur, energy expert at Uswitch for Business, said: "The UK restaurant industry is facing significant challenges as a result of rising energy costs combined with rising inflation. Rates of restaurant insolvency have increased since Covid-19 and price rises from Brexit are pushing firms to a worrying edge.

"Restaurants who are struggling with their energy bills should be aware of their contract end date and review the terms of any new deal before signing. If they have concerns that they aren't getting the right level of discount or support, they should speak with their supplier and shop around where possible.

"In the meantime, it is sensible to explore measures available to make their operations more energy efficient to mitigate against price rises and high costs as much as possible."

Photo: Koldunov/Shutterstock

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