Surviving during ‘worst time in history’ to run a restaurant

There have been plenty of challenges for the hospitality industry in the past, but more and more chefs are citing right now as the toughest time to be running a restaurant.

With rising costs for rent, energy, staffing and food, as well as a decrease in demand during the cost-of-living crisis in the UK, more and more establishments are being forced to shut their doors.

To get a range of views on the difficulties associated with operating in this market in 2025, and how to overcome them, we spoke with industry-leading chefs, some who have decided to embark on their first solo ventures, and multi-site operators.

Daniel Clifford, Midsummer House, opened in 1998

"I think the biggest challenge is probably now. We’ve been flooded, we’ve been through recessions, we’ve been through wars, we’ve dealt with lots of difficulties, but now the climate and the way hospitality is moving forward, it’s getting harder and harder to make profit.

"Profit is not a dirty word. The chairs get worn out, the carpets get worn out, the plates get broken, the glassware gets broken. You’re paying recruitment charges for staff now. Produce has gone through the roof. Everything is going up, but the only thing that’s going down is the amount of bums on seats, because people don’t have the excess cash themselves in their bank accounts, so it’s getting tougher and tougher.

"Every day you’re reading there’s more doom and gloom on the books. If you were an investor looking into this business right now, you wouldn’t invest, because it’s a really tough marketplace.

"We scrimp and save and do everything we can to make money, but it’s getting tougher and tougher. We’re fighting harder than ever now."

Jason Atherton, recently opened Row on 5, Sael and Three Darlings in London

"There's a lot of restaurants to fill in London. People are going out less, they're spending less money and landlords are expecting the same rent as they got pre-COVID. That's just not achievable.

"Everyone's having to adjust. You can't just adjust the market in one week. Things take time.

"As restaurants are closing, landlords are having to remarket their premises on a much cheaper rent. That’s why we decided to move our company around a little bit because we have to be affordable. That’s what we've done across the group, to open new restaurants that are more affordable."

Nick Beardshaw, Starling, opened in August 2024

"I don’t think you can ever time the market. That goes for when you’re buying a house or opening a restaurant.

"It has been a really hard time for hospitality, over the last four years, since the pandemic. Probably the hardest I can remember in my career of about 20 years now. But that doesn’t necessarily mean that landscape is going to stay like that.

"I think we are probably through the worst of it. Inflation has now come right down. You’ve just got to be adaptable to those circumstances. You’ve really got to watch costs, keep menus simple, control your electricity costs. You’ve just got to keep such a strong hold on finances.

"Even things like ergonomics. We’ve got the kitchen in the restaurant. The size of the space is 40 covers. That’s calculated. That was one of the criteria I had. Any bigger and you need so many staff to run it. I think 40 is the number where you can run it on a fairly low level of staff, which keeps costs in check. It is difficult, but I think you’ve just got to be clever about it. You’ve just got to stay on top of those costs."

Greg Clarke, El Bolillo, opened in September 2024

"Everything has got a lot harder as an operator. It’s literally the worst time in hospitality’s history to try and open a restaurant, because staff wages have gone where they need to be, rents keep going up, everything is going up. The price of double cream is four or five times what it was four or five years ago. Everything is ridiculous.

"But the price that guests are willing to pay hasn’t really budged a huge great deal. People in general will go to Waitrose and now their food shop will cost them £100+, but they see something on the menu and they don’t translate why that costs that amount of money.

"People are a lot more appreciative of quality, but there’s still the comparison to the chains that can produce at a lower cost, because it’s manufactured somewhere in a production kitchen and they’re keeping their costs down in those ways, or they’re bulk buying, they’re not using local farms. Customers still compare to the lowest denominator.

"There used to be a grace period within restaurants where you didn’t have to be busy straightaway. You could get away with the first year or two not really making any money. The margins are so small now. You have to be on social media every day. You just have to publicise the hell out of yourself. It’s just constant. If you’re not doing that, that’s the reason you’re not busy.

"You’ve got to open up in the right area. We think that Hove is the right area for this kind of concept, being a neighbourhood restaurant and it’s quite affluent down here.

"All these big-name chefs closing their restaurants, their time is done. It’s not slating any of them, because they’re great restaurants and it’s a shame for them, but you’ve almost got to reinvent yourself, or at least redecorate. You’ve got to reinvest in it for it to have longevity. Like Midsummer House, it’s had two stars for over 20 years. The only reason he’s still going is he invests so much in change in that place and keeping it current. That’s what you have to do.

"You can’t just be like ‘right I’ve built a restaurant’, because everything has got a sell by date. Even here, we’ve got a budget and a plan that in five to seven years’ time, we need to be doing something different, or saving up the pounds and the pennies to change up the place, otherwise it is going to look shabby and dated.

"Also, unless you are a two or three Michelin star chef, the days where you can fill a fine dining restaurant of 40-50 covers are gone. There is just not the demand for that."

Rik Campbell, Kricket

"Something hospitality bang the drum for, but I don't think it'll ever happen, is a reduction in VAT. Twenty per cent VAT for hospitality is huge.

"If you go to any other country, like America for example, in some states it is as low as five to seven per cent. It’s funny, we have one of the most convoluted tax systems, but something like VAT, it's very simple, it's just 20% on everything apart from utilities and children's books.

"I think we could do with a little bit of a break on that I think and ultimately it would end up back in the system anyway."

Dom Hamdy, HAM Restaurants

"Obviously dropping VAT rates and dropping business rates is going to help hospitality to survive and thrive, and I'm absolutely all for that.

"I think there's a bigger argument around the High Street and businesses that are competing with online businesses. We are competing, in a way, with people like Deliveroo and Uber Eats, who don't need to pay business rates, but not in the same way as a stationary company or something like that, that actually it is unaffordable to be on the High Street, because you're competing against these online businesses that don't need to pay business rates and the tax rates etcetera.

"But ultimately, restaurants are entertainment spaces and we're not competing with that online market that doesn't need business rates. It's completely archaic and I think it needs to be looked at again.

"There's obviously this service charge legislation and it's kind of one thing after another, which is resulting in tighter margins.

"I think we've been facing headwinds for many years and it's not becoming any easier."

How challenging are you finding operating in hospitality in 2025 and what can be done to help?