The recent decision by the people of Britain to leave the European Union have caused waves across the world as citizens and business owners scramble to make sense of what is happening, and what will happen. Restauranteurs have not been spared. Given that the hospitality industry already operates on slim margins, any increase in costs, whether in the form of import charges, currency exchanges or labor, can have a major effect. According to
Bloomberg, some of Britain's more upscale restaurants are already starting to feel the effects of Britain's Exit.
Particularly in London, some higher-end restaurants have reported a slow start to July, as corporate and individual customers lower spending while keeping a close eye on the weakening value of the pound, and restauranteurs feel the squeeze from increased costs for imported food (estimates say the U.K.
imports about half of it's food). One restauranteur, Richard Corrigan, said he is stocking up on
French wine before the value of the pound really drops, and another fears rising food costs could price expensive items, such as jamon iberico from Spain, out of reach.
Much of the downturn, it seems, has to do with people being cautious; excess expenses are curbed in times of uncertainty. As
Bloomberg notes, the majority of economists consulted predict the U.K. will head into another recession as result of Brexit. Already, some large plans for new restaurants have been scrapped, some involving millions of dollars in planned investments.
The long-term implications of Britan's decision are still unkown, as we are still in the earliest stages of Brexit. Regardless of the effects, no doubt the hospitality industry will see some changes. The only question now is how negative or positive an effect this will have on the industry. Restauranteurs in Britain (or sourcing from the UK), have you begun to feel the squeeze, or is it still business as usual? Let us know what you think via Facebook, Google+ and Twitter.
Source: Bloomberg
Tablebases.com
