Two restaurants close everyday in Ireland, costing the economy €288m

Two restaurants close everyday in Ireland due to high-running costs, with industry representatives calling for government intervention.

A new report has found that the closure of 212 restaurants, cafés, and other food-led businesses in 2024 has cost the Irish economy €228m since January - this is, on average, two everyday.

The main reasons for closures and losses in the sector are increased costs, labour availability and taxes such as VAT, which representatives are calling for the government to revert from 13.5% back to 9%.

Adrian Cummins, CEO of the Restaurants Association of Ireland (RAI) said: "Two restaurants are closing every day in the State.

"This is not sustainable for our industry. It is in a very vulnerable financial place in terms of the future of our position.

"VAT increases have really rocked our industry to the core," Mr Cummins said.

According to a new report, authored by economist Jim Power on behalf of the RAI, every time a restaurant closes the State loses €1.36m and 22 people become unemployed (directly or indirectly).

The €1.36m figure, in total economic impact in one full year, comprises €576,554 in lost wages and €115,310 in payroll taxes.

There is also an average loss of €105k in VAT and nearly €12k commercial rate receipts paid to the local authority. If the workers laid off had to go on social welfare payments, the annual cost would work out at around €440k.

Mr Cummins concluded by saying that the 9% VAT rate is the ‘only show in town’ in terms of helping the industry, adding: "All of these closures can be attributed to government policy and especially the increase in the VAT rate."