Restaurants feel the heat as energy prices soar

Energy prices eat up profits at 90% of restaurants, Bookatable Dining Index reveals

Press Release DistributionBookatable – 10/02/2014: UK, 10th February, 2014: In the last six months, soaring energy prices have had the biggest negative impact of any factor affecting profits in the hospitality industry, according to 90% of restaurant owners surveyed in the latest Bookatable Dining Index.

The Index, based on interviews with 200 UK restaurants and supported by industry data, reveals the challenges currently facing the sector and suggests that aside from the short term impact, rising energy costs are also expected to stifle future growth in hospitality.

The study shows that despite over half (68%) of restaurants adopting measures to cut their energy usage in the last year, the vast majority (90%) say that rising energy costs have made them re-assess menu prices in the last six months.

Moreover, food costs continue to cause concern. Bookatable’s 2013 Dining Index revealed that food prices had overtaken rent and rates in the list of overheads facing UK restaurants, coming second only to staff wages, and the 2014 Dining Index now shows that the cost of food remains the biggest expenditure for one in five (20%). Eight out of ten restaurants believe rising food costs have had the greatest impact on menu prices in the last six months.

When asked what measures they have introduced to reduce costs in the last six months, over half (60%) of restaurants report they have actively started to monitor food waste and almost a third (28%) have reduced portion sizes to avoid binning uneaten meals. The Bookatable data shows 70% of restaurants consider food wastage to be a huge concern for their business. A recent industry report estimated that the average annual cost of wasted food per outlet is £10,000[i].

Joe Steele, CEO of Bookatable, says, “Bookatable’s Dining Index shows the pressures felt by the restaurant industry. Many restaurants operating today have worked hard to survive the economic decline, but now face similar challenges that consumers will recognise from their own households, as food and energy prices soar. This is a real concern for the restaurant industry as well as diners, as while profits and growth suffer, the cost of eating out is impacted.”

John Dyson, Food Adviser at the British Hospitality Association, comments, “The latest Bookatable Dining Index highlights the issues restaurants have been tackling in the last six months. Higher energy bills and rising food costs have made it much tougher for restaurant owners to grow their business or remain profitable. During the recovery phase, restaurants will need to focus on the areas that can make a difference to their business – whether that’s hiring the right talent, being more marketing savvy or adopting new technology that delivers true ROI.”

In terms of technology, the report found that while software and hardware remained the second lowest expenditure for restaurant owners, 88% of restaurants are now reaping the benefits of online bookings, compared to 68% six months ago.

The survey also reveals that eating out has become more of a ‘social’ experience, with customers using mobiles to share their dining experience on social networking websites. Nearly all restaurant owners surveyed (88%) have witnessed customers taking pictures of their food in their restaurant in the last six months.

In 2013, nearly half (48%) of restaurants said they were actively using Twitter and 73% using Facebook. In 2014, this has increased to 65% and 76% respectively.

Whilst a large proportion of social media buzz around eating out is positive, the new wave of food critics who upload a photo of a nice meal or check in at a restaurant pose a risk to merchants. The majority of restaurateurs (86%) believe that bad reviews have a negative impact on their business. has launched a new ‘top rated’ badge scheme on its website, to spotlight restaurants that consistently receive high star ratings from diners.

To download the full report or see infographics, visit:

  • One Comment
  • Chris Kennedy

    There are many ways in which a restaurant can reduce its energy costs. Engaging a competent TPI Code registered Utility Manager is the first step.

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