Domini Kemp warns of more closures in Irish restaurant sector

Domini Kemp, co-owner of the Itsa food group and celebrity food writer, has warned of more closures in the restaurant sector.

Ms Kemp said that rising food prices coupled with the VAT increase and wage rises will put significant pressure on small independent traders.

Ms Kemp was commenting days after the shock closure of Fallon and Byrne’s foodhall and restaurant business in Rathmines, and she forecast “more will follow.”

The Itsa business has been operating for more than 20 years and today operates four brands across 12 outlets.

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Latest abridged accounts for Itsa Ltd show that the business recorded post-tax profits of €96,071 in the 12 months to the end of February last.

“The last two years have been tough but we are really pleased with the changes we have made,” she said.

At the end of last year, the group employed 150 staff. “The last two years have been about driving sales, focusing on costs, acquiring Hatch & Sons as well as closing two non-performing units, in Dundrum and Dublin 2, ” she said.

“Business remains challenging – margins are compounded by increases in rents, rates, pressure on wages as we’ve reached ‘full employment’ and increases in food costs with pork prices surging last year – plus the VAT hike. Not all these costs get passed onto consumers who remain very price sensitive.”

‘Significant impact’

Ms Kemp added that “the imminent rise of the minimum wage in February will have a significant impact right across our sector as we are a low margin, high employer industry”.

She estimates the wage increase “will add another €100,000 to our staff costs. Insurance is north of €70,000”.

Ms Kemp also stated that the cost of changes to sustainability/environmental practices added €30,000 to the group’s expenses last year. “Many in the food and hospitality sector have been quick to respond to consumer demands – but unfortunately many of these changes  – despite being well-intentioned – are not appropriate for the Irish market,” she said. “We all need more education and better information so businesses can make changes that can be appreciated by the consumer and that is not just an attempt at ‘green-washing’.”

The Itsa group operates in 12 locations, with brands including Alchemy Juice Co, Itsa, Joe’s and Hatch & Sons. The group also operates four standalone restaurants and cafes, including the recently opened The Commons in the new Museum of Literature on St Stephen’s Green, and Table Restaurant in Brown Thomas.