Restaurants warn they will have to charge diners £100 for steaks if they pass sky-high energy bills

Restaurant owners are warning that they will have to charge £100 for a steak if they pass on sky-high energy bills to diners – as one expert says 50,000 businesses are at risk of bankruptcy.

Martin Williams, chief executive officer of Rare Restaurants, which owns the Gaucho steakhouse chain, said small and medium-sized businesses (SMEs) were at risk of collapse due to rising costs.

He called on newly appointed Prime Minister Liz Truss to intervene with a package of support to rescue thousands of businesses, along with hundreds of thousands of jobs, from default.

Mr Williams told The Telegraph: ‘At Rare Restaurant we have fixed our energy prices. If we didn’t, across all of our 22 restaurants, the impact of increased costs would result in a £3.5 million impact on our profits.

‘To stay profitable this means steak will have to triple in price to more than £100.

‘Unless energy prices are addressed, restaurants across the industry will not be able to stay open and many small and medium businesses will sadly collapse. “

Beef prices at the chain’s 22 restaurants currently range from £19.50 to £57 depending on size.

Meanwhile, a once-Michelin-starred restaurant in an affluent cathedral city is being forced to close due to soaring energy bills.

David Nicholson, owner of the famous Black Rat in Winchester, Hampshire, says energy costs have increased fivefold from £20,000 a year to a staggering £100,000.

The restaurant owner, who held on to a Michelin star for more than 10 years before losing it during the pandemic, said rising costs were making running the restaurant ‘an unviable business’.

Mr Nicholson, who opened the restaurant in 2007, said: ‘The main reason behind its closure was the effect of growing energy bills.

‘It will go from £20,000 to £80,000 to £100,000.

Martin Williams, chief executive officer of Rare Investors, which owns the Gaucho steakhouse chain, said SMEs are at risk of collapse.

Chef Phil Storey and civil servant David Nicholson pose outside the Black Rat in Winchester, Hampshire

New Chancellor Liz Truss will this week announce a £40 billion package to help businesses cope with rising energy bills

‘There’s also the issue of personnel, including on duty staff and chefs. Wages and food prices have skyrocketed.

‘We never set out to make a lot of profit, but we certainly don’t want to lose. It has become a non-viable business. Winter will not be a happy time for many people.

‘Costs at The Black Rat are the highest of my businesses.’

Pubs across the UK are now fearful of raising pints prices to £20 or closing altogether this winter.

James Allcock, 36, once poured his life savings into the Pig & Whistle pub in Beverley, East Riding of Yorkshire, but warned inflation is ‘out of control’ and energy costs are ‘strangling’ businesses. small business like yours.

While his annual gas and electricity bill used to cost him £2,900, he says the cheapest quote he’s getting now would show him spending more than £22,000 on it. energy.

Mr Allcock added that the forecast bill is now higher than his rent and would be the third highest cost after VAT and wages.

He told Sky News: ‘I just found out that it costs £125 a day just to turn on the heating in winter. That will turn a day of small profit into a day of big loss.

‘I actually feel a bit like the band on the Titanic, or I’m rearranging the deck chairs to prevent it from sinking’.

Now, he worries that other small businesses could go on forever without immediate and widespread government support.

Dr Nicola Headlam, chief economist at business data analytics firm Red Flag Alert, today warned that SMEs are facing a crisis ‘significantly worse’ than with any recession.

Businesses that were once profitable are now losing money with energy prices more than doubling for most of the year.

This comes as a decrease in gas flows from Russia before and after the invasion of Ukraine in February has pushed European prices up by nearly 400 percent over the past six months, sending electricity costs soaring.

Dr Nicola Headlam, chief economist at business data analytics firm Red Flag Alert, has called for an important package of government support for small and medium-sized businesses.

James Allcock, 36, once poured his savings into the award-winning Pig & Whistle pub in Beverley, East Riding of Yorkshire, but warned inflation is ‘out of control’ and energy costs are ‘squeezing’ choking’ small businesses like yours.

While his annual energy bill for the small venue (left) previously cost less than £3,000 a year, Mr Allcock said his cheapest quote would now see him spend more than £22,000 a year year for gas and electricity

Night economy boss warns more than 600,000 jobs could be lost amid site closures

Sacha Lord, founder of Parklife Festival and popular nightclub pop-up The Warehouse Project, told MailOnline that hundreds of thousands of jobs could be at risk as hotel venues close.

A survey by The Morning Advertiser found that 70% of pubs could have closed without government intervention on energy costs.

Mr Lord says that from these statistics his team has calculated that 619,000 jobs are at risk – 271,000 of them are under the age of 25, ‘adding to the youth unemployment crisis years.’

He pointed out that 271,000 would be a 63% increase in youth unemployment compared to the latest ONS figures.

“And those stats are just for pubs,” he said. ‘Think about how many people in jobs related to this sector will quit – van drivers, fruit and vegetable sellers and so on – unless there is intervention. This can be avoided. ‘

He welcomed the ‘positive noises’ from Liz Truss, the head of Tory leadership around the VAT cuts, but said ‘we heard nothing about energy.’

Sacha Lord, Greater Manchester Nighttime Economic Advisor, says hundreds of thousands of jobs could be at risk as hotel venues close

As Manchester’s tsar of the night economy, Mr Lord said he was often approached by those working in the struggling sector.

However, he said, he recently had to turn off his Twitter DM because he couldn’t cope with the flood of messages from desperate hosts he was receiving.

“I am not a mental health expert,” he said. ‘There is one person to whom I must refer to the Samaritan.

‘He has a pub in the south and I got a phone call from him and he was in tears. He’s been in this industry all his life.

‘He pressured his wife to mortgage their house to support the business and now he is at a loss. His wife left him and his children won’t talk to him. ‘

Asked if he saw an end to the crisis affecting the sector, Mr Lord said he hoped it would continue ‘for at least another two years’ and called for ‘immediate action’. from the government.

Ms Headlam told BBC Radio 4’s Today’s Today programme: “Our core scenario for default rates this year is 26,000, which is very high and that suggests some shake-up from the pandemic for businesses. encountered a stimulus but eventually defaulted on its debt.

‘Looking at the rise in energy costs, that puts another 75,000 people at risk of insolvency and, within that range, the 26,000 people we expect to fail without support. substantial government.

‘In total, 50,000 defaults, the highest ever and significantly worse than any past crisis or recession.’

And asked if that could mean hundreds of thousands of redundant staff, she added: ‘Absolutely, because those are just companies with 10+ employees and earnings of more than 1. million pounds.’

The economist continued: ‘Imagine that you and I are directors of a company and in 2020 we have brought in exactly £1 million.

‘We expected to assume a 10 per cent margin, but realistically when you look at the numbers we’re going to make £90,000 – that’s going to be our profit.

‘This year nothing has changed but our energy costs, if we just doubled our energy costs and we see businesses have more than that, then our company will loss of 230,000 pounds.

‘As you can imagine, it wasn’t a board meeting where everyone was smiling.

‘Lots of businesses [will become insolvent. With businesses that are carrying significant debt or not growing, zombie businesses, that isn’t this category. 

‘These are otherwise profitable businesses. We would need a very soft amount of assets to withstand the £230,000 loss this year, let alone next.’

And asked if that is likely to mean hundreds of thousands of redundancies, she added: ‘Absolutely, because that is only companies with 10-plus employees and turning over £1million.’

The economist continued: ‘Let’s imagine that you and I are directors of a company and in 2020 we turned over exactly £1million. 

‘We would expect let’s say a 10 per cent profit margin, but actually when you look at the numbers, we would have made £90,000 – that would have been our profit. 

‘This year, changing nothing apart from our energy costs, if we just double our energy costs, and we have seen businesses with a lot more than that, then our company would post a £230,000 loss.

‘As you can imagine, that is not a board meeting where anyone is smiling whatsoever.

‘A lot of businesses [will become insolvent. With businesses that are carrying significant debt or not growing, zombie businesses, that isn’t this category. 

‘These are otherwise profitable businesses. We would need a very soft amount of assets to withstand the £230,000 loss this year, let alone next.’

Ms Headlam has called on the government to provide a sizeable support package to save thousands of SMEs and protect jobs as the cost of living crisis strangles firms across the UK.

She said: ‘The worst of all worlds would be spending hundreds of millions of pounds in order to support energy companies in their current form. 

‘We need that money to be direct to the SMEs that really need it. This is a really difficult problem. 

‘I think the main question has to be in terms of the package we are hoping will be sizeable from the govt when they bring it forward, the front of their minds needs to be avoiding this crisis in the insolvencies of small businesses, not preserving the status quo in the market.’

A report published by the Federation of Small Businesses today has also found that 96 per cent of small firms have flagged concerns about rising energy bills.

Nearly 40 per cent say they are paying more than double their costs, while 45 per cent have had to raise prices to remain viable. 

Has your restaurant been affected by soaring energy prices? Get in touch at [email protected]