Traditional restaurant model is "totally messed up" says London operator

08 June 2022 by
Traditional restaurant model is "totally messed up" says London operator

The catastrophic impact of rising food and energy prices combined with staff shortages has been highlighted by one restaurant in the City of London.

Enoteca Super Tuscan, near Liverpool Street Station, has been faced with energy costs doubling in price over the past eight months, while customer numbers have dropped to 75% of what they were prior to the pandemic. Meanwhile, the increase in the price of ingredients of between 10 and 50%, and the rise in VAT from 12.5% to 20% on 1 April has added to the financial challenge of operating the business.

Nick Grossi, who has run the 35-seat Italian eaterie for 10 years with his brother Simon, said they were contacted by their energy supplier in October 2021 to explain that the rug was being pulled on their fixed price contract. "We had previously negotiated the very competitive rate of 13p per unit, but we were then told that it was going to be increased to 29p per unit."

The Grossis found a better rate with an alternative energy supplier, but then after lengthy negotiations decided to remain with their existing supplier at a rate still considerably higher than their fixed rate.

"The problem is that the previous model of running restaurants is now totally messed up," said Grossi. "The customer will look at the ingredients they are receiving on the plate and make a judgement as a fair price they are willing to pay for it. We therefore cannot pass on all the increase in costs we are suffering to the customer – they just won't pay it."

It is for this reason that the restaurant has so far not increased prices since March this year, despite the 7.5% increase in VAT in April and other inflationary pressures, and intends not to do so for as long as possible.

"We don't want eating out to become so expensive that people don't want to go out as frequently as they previously did, but I'm personally noticing that eating in restaurants is becoming more and more unaffordable" said Grossi. "We are trying to find the right balance and cut costs where we can."

This means the kitchen now has just two chefs as opposed to three pre-Covid and the front of house team has also reduced by one. Dinner service has been reduced from 5.30-10pm to 6-9pm, meaning a loss of trade of seven and a half hours a week between Monday and Friday when the restaurant is open. "If one of the chefs is unwell, we have to close until they come back," said Grossi. In order to give the team a well-deserved break, the restaurant extended the Jubilee bank holiday and closed for the whole week.

"This is the most difficult trading period we have had in our 10 years here. But we are lucky in that we are small and agile and can react quickly to make changes. Being in the City most of our customers are corporate which means they are not generally as price sensitive as they are in other parts of the country.

"The business is sustainable for now, but we just don't know what could hit us from around the corner. There is only so much we can absorb."

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