W.With eating out costing more than ever, the news that food inflation has fallen to 3.4%, the lowest since September 2021, seems like it should be good news. But while we'll all be relieved with a break from rising supermarket prices – nearly £8 for a liter of olive oil, anyone? – It is important to remember that the fall in inflation does not mean a fall in prices, as a third of Britons mistakenly believe. It simply means that prices continue to increase at a slower rate.
The outlook for restaurants is somewhat bleaker. Food inflation in the hospitality industry has only fallen to 12 percent, 2.4 times that of retail. Restaurants that have managed to survive the maelstrom of challenges of recent years have inevitably had to pass costs on to menus, and consumers foot the bill. And with the “common user charge” (the latest aftershock of Brexit) now in force at our borders, prices will not fall any time soon.
But despite what we might assume, the cost of food is just a drop in the ocean of problems that increase the cost of eating out.
“It's not the cost of the ingredients per se,” says Andrea Rasca, the scathing founder and chief executive of Mercato Metropolitano, a group of food markets across London. “Brexit is killing us. And, sorry to be blunt, it's the dumbest thing in the world. No one can convince me otherwise. The only people who believe in it are older people with economic interests.”
Rasca, an Italian who now considers himself a Londoner, opened the first Mercato in Elephant and Castle in 2016 and is preparing to open a fourth in Ilford later this year. But the differences between opening a restaurant then and now are stark. “People, people, people. I can't find enough people because they don't come here anymore. “I can’t hire a waiter from Spain or Italy who wants to come here and learn the language and work.”
Finding British staff is just as difficult, he says. “The British became too rich to think they can be waiters. “They don’t understand that when you do it with a purpose, serving food is one of the noblest things in the world.” In a country plagued by endless cooking shows, it's easy to name a famous British chef (heck, even a critic), but what about a famous maitre d' or waiter? (He first dates type doesn't count.) Most Brits still don't consider a restaurant reception job to be a viable career unless it's a Saturday job for teenagers or a stopgap for twenty-somethings; while in Europe, waiting tables is a viable vocation for all ages worthy of as much respect, if not more, than that of the chef.
James Robson, co-founder of the wildly popular restaurant Fallow and the newly opened Roe, agrees that staffing is the biggest issue, one that diners probably don't think about. “While welcome, the drop in food inflation barely scratches the surface of the restaurant business,” he tells me. While he is quick to admit that Fallow is one of the lucky ones – he is doing well against the odds and relies predominantly on British staff and suppliers – he can see the impact Brexit is still having on the entire industry. “We are literally attacking immigration, which is ridiculous. The crux of the matter is simple. Europe has much more respect for our industry as a whole than the UK. That is reflected in the number of people who come here or the number of people who want to enter the industry. It's a generational thing. But the cost of staffing is so high that that is the main problem.”
So the next time you cringe at the bill, consider more than just what's on your plate. For example, in a recent video on Fallow's Instagram, head chef Will Murray explains how they balance the price of the menu by charging more for the best-selling head of cod, which they get for just £3.50 a kilo, in order to charge less for the fillet, which is more expensive to produce. This is entirely for the benefit of the consumer and is “an ongoing exercise,” explains Robson. But fishmongers have realized that what was once considered a waste product is now becoming a delicacy, so the price “must have gone up like 500 percent” since Fallow made it popular, he says. he.
Mercato, on the other hand, where the USP is high-quality artisanal products from Europe and beyond, has had difficulties with imports. Although it locates where it can, “the difficulty we have is that many suppliers [in Europe] just say no. They don't want to go through the hassle or cost of serving a country that has become so complicated. The complexity of the system is simply stupid,” says Rasca.
Also consider who serves you food, how much they get paid, and what their quality of life is (or, more importantly, what it should be). Rasca has committed to paying the London Living Wage to all of his staff, even at a cost: “We have just reduced our year-end projection by almost 80 per cent.” He sees it not simply as a moral obligation but as a commercial obligation to secure the future of the entire industry. So he's happy to take the hit, and Mercato's business model, an aggregation of 20 to 50 small businesses sharing the load, can handle it – “but if you have your own small restaurant, honestly, it's almost impossible.”
There are also hidden costs to consider. Business rates for restaurants are no joke. Restaurateurs have been calling for a cut in VAT and business rates to help the struggling sector, which has been hit, like all of us, by increases in energy and ingredient prices, as well as the costs of personnel and a drop in consumer spending. In Chancellor Jeremy Hunt's spring budget, he announced… well, nothing. Industry leaders were outraged and everyone feels the pain, even at a place as successful as Fallow. “Taxes are through the roof, unemployment is through the roof, rates, council taxes…” says Robson. “When we were given a little respite during Covid, 90 percent of all the other things are still there and they go up and get more difficult.”
Robson says they have been lucky that average spend at Fallow has only decreased marginally, but they have counteracted this by serving a slightly higher volume of customers, opening for breakfast and opening earlier on weekends. “Look, it's no wonder people take a little more care of their money. It's tough out there, we know. But the pressure on us to perform is even greater.” Rasca has also seen a decrease in spending at Mercato, rather than in the number of visitors. “They are spending a pound or less on average, but we are talking about big numbers here; Remember we have between six and seven million visitors a year,” he says.
Actually, I almost understand it from a political point of view. It is easier to control people who are unhealthy. If kids eat bad foods, their brain development slows down, so I get it. But it's Orwell. It's '1984'
Andrea Rasca, founder of the Metropolitan Market
Part of the problem, as Rasca sees it, is the lack of prioritization of independent hotel companies instead of global chains and franchises. “The banks and property companies in the UK don't like us,” he says. “They like people like McDonald's, who have a lot of cash and pay a lot of taxes, so our politicians are happy.” This, he suggests, is pushing consumers towards fast food franchises, which is having a knock-on effect on public health. “Actually I almost understand it from a political point of view. It is easier to control people who are unhealthy. If kids eat bad foods, their brain development slows down, so I get it. But it's Orwell. He is 1984. This is what scares me. “This is not the London I arrived in 2016.”
It is certainly a frightening, if not outlandish, prospect, but what can be done? Will the cost of eating out one day go down? If history is anything to go by, probably not. The last time inflation fell into negative numbers and therefore turned into deflation, was in 2015 due to a sudden drop in the price of oil. Before that it was in 2009, during the global financial crisis. Before that… it was 1960. So the cost of living crisis could end sometime in the region of three or 50 years. When we take into account that real wage growth was 2.4 percent in the first quarter of the year, the highest since July 2021, we can safely add a few more years to that estimate.
Robson and Rasca don't have as much hope either. Robson favors stability. “I would suggest we see six to nine months of declines before we can consider reducing prices,” he says. Rasca, for his part, wants to see a change from above. “Even if you don't want to be in the EU, open up the trade market and let people travel and come to the UK. Secondly, conclude trade agreements with the EU so that we can import easily. And then I really have to want better business rates and rent control.” Maybe he should have told her that it's against the rules to make more wishes.
“It's time for you and your generation to start shouting,” he adds. I promise I will write the article in all caps. I haven't, but I hope the message remains loud and clear.
