Restaurateurs say the government could do more to help keep them open
High-profile restaurateurs are among the supporters of a petition to suspend stamp duty on business leases. Tom Aikens and Soren Jessen both signed an open petition to the government, with the latter calling stamp duty charges on renewed leases "disgraceful". Jessen, a former banker who owns City restaurant 1 Lombard Street, said the recession is already putting undue pressure on struggling small firms. By maintaining charges such as stamp duty, he said, "the government could actually be causing unemployment".
Jessen has just renewed the lease to 1 Lombard Street, incurring a stamp duty charge of £54,000. "This is a commitment to our customers, employees, and the City infrastructure that should be celebrated and certainly not penalised," he said. "The government should be doing everything it can to support business in the current climate. The restaurant industry has been hit hard by the recession, so taxes like stamp duty on top of our rising costs are a kick in the teeth."
Restaurateurs have been hit heavily by the downturn. Most are suffering a shortfall in takings, some have been hit by the ripple effect of pressured landlords squeezing them for higher rental charges. Last month, London restaurant Just St James said it was facing an annual increase of £75,000 in rental payments, plus a rise in service charge of £47,000. Owner Peter Gladwin said that landlords "imagine there is another restaurant tenant around the corner... but whoever operates this expensive building still needs to make a profit."
A recent survey of 148 restaurant owners found that 50 per cent were concerned about the economic climate. But not all restaurant brands appear to be suffering. The Jamie Oliver chain Jamie's Italian announced at the start of the month that it would open seven new restaurants next year. Managing director Simon Blagden said the group was already averaging 17,000 covers per week across four restaurants with an average spend of £20-£22 per person.
Job opportunities in the hospitality sector actually rose during the month of May, despite an overall two per cent reduction in vacancies across the country. According to the Monster Employment Index, hiring in hospitality and tourism jumped by 15 points, or 12 per cent in May, due to "robust seasonal hiring" in London, the South East and Wales.
Posted 26 June 2009 : Director.co.uk