Over a third of UK restaurants (34 percent) fear they won’t survive until Christmas.
This is the result of a new survey of 200 restaurant owners and decision-makers, where a similar number (32 percent) believe government support to the industry is inadequate.
Tanisha Broady, owner of the Rock of Virtue Café in Cambridge, told MailOnline Travel that she needs £ 10,000 from the government to cover the rent to keep her business afloat for the next three months.
Over a third of UK restaurants (34 percent) fear they won’t survive until Christmas
Rahul Sharma, director of the Regency Club in London, also expressed concern about government support for the sector.
He told MailOnline Travel that he received £ 3,000 in government grants for each ban and that “the vacation program has helped a lot”.
But he added, “The biggest expense for us is our rent – our business model is designed as a restaurant, but now we work as a takeout. So we’re still paying the overheads of a restaurant. Something needs to be done for people who pay high rents. No agreement was made on a broader commercial basis. ‘
Chris Jones, owner of the Naked Deli in Newcastle, said, “This year is all about survival. We have been hoping from week to week that we can turn the lights on and keep the staff busy. “
Kate Nicholls, CEO of UKHospitality, would like to see a recovery fund set up.
She said, “The sector prefers to get back to the recovery, but with constraints that deny us the chance, many venues will fail unless the government gives much more support.
‘The restrictions on the new levels mean 94 percent of our members are not viable or are trading at a loss. That’s a £ 7.8 billion success that will see companies go under and jobs be lost.
‘For every chance of survival, we have to replace the job retention bonus, the extension of the rental debt moratorium, and compensation for business losses. Tesco has just returned nearly £ 600 million in support of the government and other supermarkets are expected to follow suit. This will allow a hospitality and tourism restoration fund to be set up to keep the sector alive. ‘
Pictured Tanisha Broady, owner of the Rock of Virtue Café in Cambridge, told MailOnline Travel that she needs £ 10,000 from the government to cover the rent to keep her business afloat for the next three months
Peter Backman, a UK-based independent restaurant analyst, also issued a warning: “Restaurant owners have not had tough years. Unfortunately for many, making it by 2021 will be an achievement. We’re not out of the woods yet. The pandemic is still not over and economic conditions in January and February could be even tougher for restaurants, not least if we stay on restrictive shifts. ‘
During the pandemic, many restaurants quickly switched to online delivery, with the average restaurant only taking two and a half weeks to implement a takeout service once the lockdown was announced, according to the online food delivery platform that surveyed Censuswide had commissioned.
Due to existing restrictions, these restaurants would have lost an average of 40 percent of their sales during the lockdown, but were able to offset the remaining 60 percent of their average sales with online orders.
In fact, more than half (56 percent) state that they have closed permanently without online ordering and taking away. According to restaurant owners and managers, the pivot saved an average of 15 jobs.
Rahul Sharma, pictured, director of the Regency Club in London, said: “Something has to be done for people who pay high rents.”
As lockdown restrictions wear off, 79 percent of restaurants plan to resume online delivery, but the long-term picture is fragile.
According to the survey, 78 percent of restaurants have registered with “aggregators” such as Just Eat, Uber Eats or Deliveroo, which are so named because they put restaurants together on the same platform.
This year is all about survival. We have been hoping from week to week that we can turn on the lights and keep the staff busy
Chris Jones, owner of the Naked Deli
Over 12,000 new restaurants have joined Deliveroo in the past few months, and many would have benefited from Just Eat’s 30-day support package in March when more than £ 11 million of support was diverted to independent restaurants.
While signing up with aggregators works for many companies, it is not a long-term solution for some.
The commission charged – up to 35 percent – can be one of the problems, although individual deals can be negotiated, as the aggregators explain.
The criticism of the Just Eat, Deliveroo and UberEats cut was first reported by Mail in June – and it’s still gushing away.
In the should-be-noticed survey commissioned by a rival to aggregators, only one in three (33 percent) restaurants believed that aggregators set fair commissions and offer a financially sustainable option.
For example, Tanisha pointed out that for an order she recently took for a £ 41 order, Deliveroo went to £ 17.
Uber Eats, along with other “aggregators” for the commission it charges, has come under fire
Rahul, meanwhile, revealed what his restaurant would achieve after using Uber.
The end user who orders a £ 20 meal will be charged £ 3.50 on delivery and £ 2.00 on the Uber service charge, leaving the customer with an invoice of £ 25.50.
Uber collects £ 11.50 from the customer and the restaurant receives £ 14 in revenue from Uber.
On top of that there are costs – £ 0.3 of VAT on the entire order plus £ 8 of operating and fixed costs (ingredients, labor, restaurant rent and utilities, etc.), leaving a gross profit of £ 2.60.
He added, “If we were to work normally, we could afford to rely on those margins, but in the moment – we are working at reduced capacity, having employees on vacation and constantly panning according to government guidelines – are these margins don’t work in our favor at all. ‘
Chris Jones, who runs The Naked Deli, said 2020 was about the survival of his outlet
Ryan Lynch, who runs the Dough Restaurant in Liverpool, said that at Just Eat, the commission is 14 percent plus VAT without using the delivery service and 33 percent plus VAT when using the drivers.
These case studies were presented by Flipdish. However, MailOnline spoke separately to a buyer who wanted to remain anonymous and worked for a London restaurant that echoed the aforementioned fear of the fees.
He said his company uses Deliveroo and admitted it was a lifeline during the lockdown – “we relied on their customer base” – but added that the 32 percent commission charged his company is “pretty crippling”.
Flipdish points out that it has a much lower commission rate – usually between seven and nine percent – and is also involved in the Go Direct Coalition, a group that encourages the nation to pay direct at restaurants, cafes, pubs and takeaways to order. This way they can keep as much of their earnings as possible.
Members include Royal Chef Damien Wawrzyniak, Manicomio’s Chef Tom Salt, and Tanisha.
Another example of a restaurant business plowing its own online furrow is London-based Cuvee.
Co-owner Max Venning told MailOnline: ‘We take care of our own deliveries. With our own couriers, we can ensure better service. We employ people from restaurants and bars who are unemployed, which was important to us. ‘
Flipdish is part of the Go Direct Coalition, a group that encourages the nation to order direct from restaurants
Fionn Hart, UK Country Manager at Flipdish, said: “Almost half of the restaurants that turned built their own apps and websites. In doing so, they have created a sustainable business model that will allow UK restaurants to recover and then revive. ‘
Deliveroo said in a statement: ‘Deliveroo is a company built on a love for small, independent restaurants. Our absolute priority is to support your business, especially during Covid-19. We pride ourselves on helping them reach new customers and grow their sales through delivery. In the past few months, Deliveroo has added over 12,000 new restaurants, 9,000 of which are small restaurants. Our smaller restaurant partners have seen record growth since March.
Deliveroo charges different commission levels depending on the agreement with a restaurant partner. This is then reinvested in our business
‘During the Covid crisis, we invested millions in our restaurant partners to help them grow their sales and develop new products and campaigns that support both their dine-in and delivery businesses.
” Deliveroo calculates different commission levels depending on the individual agreement with a restaurant partner. This is then reinvested in our business to pay for driver fees, customer service and improving our restaurant services. ‘
Just Eat said: “Just Eat is only successful if our restaurant partners are successful. We believe our commission rates are in line with the value we provide to our partners and we have a track record of making restaurants successful.
‘Since the pandemic began, we have supported the many thousands of independent restaurants we work with through a range of support measures, including commission discounts for delivery and removal of commission for pick-up orders. We are still examining measures to support our restaurant partners through further closure and restriction periods.
“We strive to add value to our partners’ businesses every day, and many grow and thrive by working with Just Eat.”
Uber Eats said, “We are committed to supporting restaurants and the thousands of people who rely on them for work and essential service during this difficult time. At the start of the crisis, we took a number of initiatives to help restaurant partners, especially small business owners, set their kitchens on fire to feed people across the country. ‘
MailOnline reached out to the Treasury Department for comment, but none was released.