Ukiyo on Exchequer Street in Dublin is one of almost 600 restaurants that have closed in the past 11 months. Photograph: Alan BetsonLast Sunday, after working all week, my husband and I spent an afternoon in our former bakery that has supplied our two cafés. We were giving the space a final deep clean before it was handed over to new owners.
So where has all the margin gone? The fault lies mostly with the Government. Over the past year, they have implemented policy after policy that have made it feel like death by a thousand cuts, the key ones being the mandatory pension scheme , the minimum wage increase , the sick leave increases, a new public holiday, and the PRSI contribution rate increase. Worst of all, is the VAT returning to 13.5 per cent while worldwide inflation is already crippling the industry.
I suspect there is another culprit that has also been eating up margin. I think it highly unlikely that all the price increases we have endured as a nation, as private consumers and small businesses, are down to true inflation. For example, our cafe got a complaint from a customer about the price we charge for our dairy-free milks. We charge 80c because of how much these milks cost us. A carton of Oatly from our supplier costs us €2.
Furthermore, it appears Irish energy suppliers have tried something similar. From what I understand, they buy their gas/oil up to a year in advance. However, when the war in Ukraine began and crude oil and gas prices skyrocketed, Irish energy companies increased their prices immediately, but this was on gas that had been bought well in advance and at the lower rate. Unsurprisingly, changes in electricity/gas prices by Irish suppliers has not been so swift in reverse.
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