Restaurants Are Too Expensive – Eh?

Pound signAnything is expensive if you can't afford it. Of course I get that. And with the horrendous across the board price increases which we have seen recently, many have had to readjust budgets. Luxuries such as eating out are the first to be culled. I get that too; however, I guess you don't read a food blog if the idea of going to a restaurant is an anathema.

But even from those who ought to know better (and my late mother in her latter years was one of the worst culprits) I hear a lot of nonsensical whingeing about restaurants and their pricing. The inspiration for today's musings came from writing my review of Dine Craiglockhart. As I often do I glanced at Trip Advisor. Reaction was mostly terrific, but one comment stood out. City centre prices in the suburbs. A sign of how Edinburgh has become devoted to the tourist pound.

Now, steak aside, the most expensive main course on that menu cost £19.50, for baked sea trout. Well, you can say, (if you're really stupid) I can buy a bit of trout for a lot less than that. (Actually, at the ludicrously expensive Forman & Field, I see two 150g sea trout fillets advertised for £36.95. but let's assume our bold restaurateur isn't so daft as to shop there.) But first some basic maths. Food eaten in restaurants attracts VAT. That's why coffee shops will always ask if the food is to take away or to eat in. VAT is a whopping 20%, meaning that of that £19.50 the proprietor will get £16.25 net. He must account to the Revenue for the tax, and for the privilege of being an unpaid tax collector he needs to keep detailed records, otherwise deep trouble with the VAT man awaits.

It goes without saying that the fish needs to be bought. How many portions exactly? While if you can't be busy on Friday and Saturday nights you might as well shut up shop, but how much will you need for Wednesday and Thursday? And if you don't sell it all? Or if a junior chef mucks up cooking a piece? Any potential profit on wasted food turns into a 100% loss. Are you aware that, according to the Office of National Statistics, food inflation between December 2022 and December 2023 ran at 26%?

I mentioned chefs? Any idea how much chefs cost? And they have to be of decent quality. If you have a bad meal, how many people do you tell? You probably know the old adage that if you pay peanuts you get monkeys. Even the minimum wage is going up to £11.42 an hour, a year on year increase of nearly 9.5%. And it's arguable that front of house staff are even more important. In the history of Tom Eats! many a good meal has been marked down because of poor service.

And that's just the staff you're aware of. What about the ones you never see? The kitchen porters who scrub the pots. The cleaners who make sure the place is spotless when you walk in. We will generally be judgmental about the state of the loos. Increasingly these days, hygiene equipment is leased - at a price.

Establishments of a certain size pay a fortune in commercial rates. In Scotland they don't enjoy the relief currently afforded to equivalent places in England. Are you aware that the Basic Property Rate is 49.8p based on the Rateable Value? And for that, do our restaurateurs get their bins emptied free? Not a chance. Waste removal is big business, and expensive.

I've written many times of the importance of a first impression. For many, the right type of music assists. It also requires a music licence payable annually. And you can't sell booze without an annual renewal fee to the licensing board. So that's food, staff, rates, licences. What else? Silly me. Are you complaining about your fuel bills? For many restaurants, soaring energy bills have been the last straw, and unlike us in our own homes, they don't have the luxury of leaving rooms unheated.

There is one other teeny thing I've overlooked. The people who own these businesses which bring pleasure to so many might themselves want to be paid. Until they are getting a decent return on their capital they might as well be working for someone else. Yet I know many for whom the minimum wage for the 60 or 70 hour weeks they are putting in would be untold riches. In spite of the galloping inflation we are all suffering, the ONS tells us that restaurant prices in the last year have increased by only 7.7%.

So if you are even thinking of complaining about the price of a plate of expertly cooked, top class food for which you are being charged less than 20 quid, put your brain in gear first.

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  1. Janet Hood on 28th February 2024 at 5:49 pm

    Tom, well said, sir! x

  2. Janet on 28th February 2024 at 9:12 pm

    So true…and then there’s the stress and panic of anyone getting food poisoning, or claiming to have got it after a visit to a particular restaurant Then there’s the on line reviews which can be excoriating on social media even without basis but which can be so damaging…all of which means you would need good legal cover…you have to be strong and determined to run a restaurant business.

  3. John B on 29th February 2024 at 7:45 am

    I love this Tom.

    Couldn’t agree more! Typical restaurant margins are around 3-5%, few places own their property so are at the behest of landlords (on top of supply chain frailties, consumer sentiment, regulations and a bottomless list of other risks). The people who choose to work in this insanely competitive and fragile industry work incredibly hard for very little reward. Many risk their life savings and very few restaurants survive/thrive over the long-run. I’m not entirely sure what keeps these people going but I’m certainly not going to give them a hard time for trying to cover their costs!

    Rant over.

  4. Paul on 29th February 2024 at 8:12 am

    Good, sensible article.

  5. Fiona Garwood on 29th February 2024 at 9:28 am

    Well said. This article needs a wider audience.

    • Tom Johnston on 29th February 2024 at 10:01 am

      Well, we have gone over the 70,000 hit mark for the first time, so we’re doing our best.

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