Close to a fifth (19%) of takeaway restaurants have been forced to close early over the last three months due to supply chain issues, while 18% have had to do so because of low staffing levels, a Deliveroo survey has found.
Supply chain issues are causing “widespread problems across restaurant operations” the food delivery platform said, with more than half of restaurants polled reporting they have had to remove items from menus due to lack of availability.
Nearly half of the 350 small and independent restaurant partners said they have had to put up prices, the knock-on effect of 89% of them having seen wholesale costs increase.
Supply chain difficulties is just one of the “twin pressures” facing restaurant owners, said Deliveroo UK’s chief business officer Carlo Mocci, the other being staff shortages.
Nearly two-thirds of partner restaurants reported being understaffed, and “the problem is becoming more acute” Deliveroo said, with 30% of respondents saying they have fewer staff than six months ago.
The overwhelming majority (79%) described recruiting more staff over the past three months as “challenging”. Restaurants are also having to increase salaries across a range of jobs to attract staff, with 90% raising the wage levels of chefs.
As a result of the shortages, two in five restaurants surveyed have been forced to change operations, such as by rejecting bookings or limiting opening hours.
Mocci said Deliveroo was backing UKHospitality’s campaign calling for the government to commit to a permanent 12.5% rate of VAT for hospitality.
“Restaurants are a vibrant part of our local communities and critical to the economic recovery, so no-one wants to see them forced to turn away dine-in customers. Making the VAT cut permanent for hospitality will go a long way in easing the financial burden, protecting jobs and livelihoods,” he said.
The VAT rate on restaurants as well as pubs, holiday accommodation and attractions was temporarily dropped to 5% last summer at the height of the pandemic. In October it rose to 12.5%, and is due to return to the pre-pandemic level of 20% in April next year.
UKHospitality and other trade bodies affected are calling for the current 12.5% rate to be maintained.
“With fragile consumer confidence further damaged by the impact of the new Omicron variant, at the start of what should have been a key trading period for the sector, on top of ever-rising costs, chronic staff shortages and ongoing supply chain issues, the government needs to act to support hospitality businesses,” said UKHospitality CEO Kate Nicholls.
“The best option for the government would be to retain the 12.5% VAT rate for hospitality and tourism, to allow businesses to invest in staff and skills, keep trading back to prosperity, helping the wider national recovery and keep prices affordable for consumers,” she added.
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