Scottish restaurants face collapse as they struggle with overhead costs

Speaking on BBC Scotland's Debate Night ​yesterday (18 November), Kitchin - who runs four venues in and around Edinburgh including the Michelin-starred The Kitchin in Leith - said he had heard of 10 different restaurants going out of businesses in recent days.

"These restaurants can’t pay their bills and they’re going into liquidation," he said.

"This then has a knock on effect to the restaurant suppliers, who end up having to make mass redundancies."

Kitchin went on call for more financial support to be made available for both restaurants and other businesses in the supply chain that are continuing to face significant downturns in trade as a result of the ongoing Coronavirus restrictions.

"Furlough is fantastic and it’s saving jobs," he said.

"But if you have a restaurant with nothing coming in at all, you're are still liable for the fixed costs and this is why all these restaurants are going out of business."

He added: "Every time you close a business under restrictions it costs about £2,500 to £4,500, and then it costs the same again to reopen on the other side. And so all that money we’ve spent on PPE and making hospitality venues super safe is for what?"

Responding to Kitchin's comments, SNP Cabinet Secretary for Economy, Fair Work and Culture Fiona Hyslop said the Scottish Government wanted to work with hospitality.

“We know the impact will be serious, it’s one of the reasons the next stage of business support is there, particularly for wholesale suppliers. And we’re also looking at the Tourism Recovery Group to look and see what additional support we can give to keep businesses in business.”

It comes just days after First Minister Nicola Sturgeon announced that 11 local authorities across the west of Scotland would move into the highest level of lockdown restrictions - Tier 4 - from 6pm tomorrow​​ (20 November), meaning pubs, restaurants and cafes have to close, although takeaway can still be offered.

The restrictions have no end date, but have been described by Sturgeon as being for a limited period of time.

In response to Sturgeon's announcement, the Scottish Hospitality Group (SHG) claimed that negative trends in the battle against Covid-19 are proving that the country's pubs, restaurants and hotels are not the cause of transmission.

It noted that for more than a month the majority of hospitality premises across the country have been forced to shut or faced minimal trade, with the central belt suffering from both the toughest restrictions and the highest levels of the virus.

As a result the industry body, which comprises nine of the country’s largest independent hospitality operators and collectively employ over 6,000 people, is calling for licensing hours for off-sales and hospitality to be aligned from 10am – 10pm in Tier 2.

It also says businesses in Tier 4 must have certainty that they can open as soon as possible before 11 December so they can prepare to salvage Christmas and Hogmanay as much as they can.

“Since most hospitality businesses are either shut or virtually empty, how can they possibly be responsible for the spread of the virus," said SHG spokesperson Stephen Montgomery.

"Some parts of the country are even seeing increases and it’s certainly not because people are out drinking or socialising in our premises.

“If alcohol was really that much of an issue then off-sales would have been restricted, but instead people are allowed to make spur-of-the-moment purchases to socialise with friends or family at home.

"Not only do homes lack the safety measures that we have in our businesses, for example the legal trace and protect system, but there’s no visibility of the problem for the government and people are never going to self-report that they’ve been breaking the rules.

“There’s no evidence-based argument for allowing off-sales until 10pm while we are prevented from serving a glass of wine with food up until 10pm in Tier 2. And since the argument seems to be that alcohol isn’t that much of a factor, we should be able to serve food and soft drinks until 10pm without alcohol in Tier 3.”