CHESHIRE restaurants are battening down the hatches during the credit crunch as the chairman of Chester’s Food and Drink Festival forecasts a “perfect storm”.
Stephen Wundke, who owns The Groves restaurant and chairs Cheshire’s Restaurant Association, says the industry faces a double whammy of rising costs and slump in trade.
He also fears that many Cheshire outlets could fold as soaring food, utility and staffing costs and a 35% drop in footfall are crippling restaurant owners.
Mr Wundke claimed that city and rural restaurants face “astronomical rises in costs, produce and wages; a severely shrunken market place and no financial institutions willing to lend to help good businesses through the crisis”.
He said: “Sadly, many of us simply won’t make it through and a lot of good businesses and many jobs will be lost. I believe there are 27 pubs closing weekly across the country and almost as many restaurants.”
Mr Wundke explained the “perfect storm” had been building for some years, starting with rising staff costs.
“A couple of years ago, our wage structure was under attack from the Government and in the last four years, almost 18% has been added to our wage bill, brought about by extra compulsory holidays and increases in the basic wage.
“Our utility bills began to rise, mine are now 180% higher than two years ago and within the last eight months our basic food prices have increased by 26%.”
Mr Wundke believes Cheshire dining circuit has been squeezed as regulars fend off soaring living costs.
He said: “I know that many of my fellow members of our Restaurant Association are averaging a 20-35% downturn in turnover.”
The Chester businessman explained there was no bail-out plan for restaurants which are a low priority for banks in loaning emergency finance.
He said: “Many of my fellow restaurant owners have approached their banks to help fund the “gap”. However, banks have downgraded our sector.
“Perhaps some government-backed loans so that banks will lend money to help fund this crisis would help.
“If there was at least an understanding of our problems then some help with a VAT reduction on eating out, as they do in France, could happen.”
Mr Wundke warned that the plight of restaurants, a significant contributor to Cheshire’s economy, cannot be ignored: “I think that within our industry we need to act now before it is too late. We are a huge proportion of the economy and unless we start working on people now then it may all be too late.”
