Growing number of individual businesses has shut down in the first month of 2024 as the cost of living crisis bites. So how tough is it out there?
Restaurants, pubs and cafés in the UK currently face multiple challenges, from the changing economic environment in a post-Covid world. According to UK Hospitality Market Analysis, the hosptiality industry is one of the economy’s worst-hit sectors during the pandemic. As a result of the Covid-19, these businesses experienced long-time periods of closure, resulting in a serious drop in revenues.
A number of well-known restaurants in Cardiff announced their closures in the first few weeks of January 2024. They all cited economic pressures, including rising energy costs and challenging issues facing the industry.
Even after reopening, many businesses have found that customer numbers have not fully recovered to previous levels, in part due to longer-term changes in consumer behaviour, such as increased work-at-home work and reduced socialising.
Individual business involves not only the managerial aspect but also a significant amount of personal capital investment. The staff in Atma Lounge, Anna Denning said, “It’s always going to be much harder for independent businesses because it is just one person running it and they’ve put their own money into it.” Under this case, unique challenges encountered by small business owners in Cardiff.
However, situation is different from family business. The owner of Smokewood Pizza, Hussein said, “The uncertainty of the business can sometimes make it challenging to operate and customer numbers can fluctuate. Luckily, as a family business, we don’t have the pressure of staff salaries.”
For many restaurants, fixed expenses such as rental and ingredient costs depend on a steady stream of income. UK Hospitality said a typical Welsh pub or restaurant could now pay an average £6,800 more than similar businesses in England according to BBC news.
Nowadays, restaurant industry is still in a recovery phase, managing these unpredictable revenue patterns has become an important aspect of staying in business. The United Kingdom Foodservice Market size is expected to reach USD 99.44 billion in 2024.
In Cardiff, where the food and beverage industry is undergoing a post-Covid evolution, offering a personalised experience can greatly increase customer engagement. An employee at Lilo’s Pasta, Lalith Kumar said, “Our restaurant introduces a new menu every month to attract customers, and we support the idea of allowing customers to choose their own toppings and ingredients, offering them more autonomy in their choices.”
Lalith believes this strategy is particularly important in the current hospitality industry environment, as innovation seems to be the key to success. It not only appeals to different tastes but also creates a unique eating experience. This makes the restaurant stand out in a competitive market.
An online platform plays a pivotal role in attracting customers in today’s digital age. “Recently, many local businesses have shut down in Cardiff recently,” said Yiwen Lin, the manager of Fairy Tea, “We are currently utilising various channels such as Red, Instagram and are preparing a promotion on TikTok to attract customers”.
Lin highlighted that government support could greatly enhance these efforts. Lin said, “More financial assistance from the government would be beneficial. As well as chain restaurants, it would enhance the diversity of businesses in the city.” While digital marketing is a key tool for attracting customers and reaching out to a wider customer, the full support of government programmes can provide a critically boost to local businesses, contributing to the formation of a more diverse and vibrant business ecosystem.
As customers and community members, hospitality businesses need our support and are calling for more assistance from the Government. Let’s join hands to support these local gems and ensure the diversity and vibrancy of Cardiff’s food landscape.