Tom Kerridge has warned that almost every UK food business was now on the brink of going bust – including his own Michelin-starred outlet.
The TV chef warned unprecedented inflation had hit every single cost along with customers financial difficulties during a cost of living crisis.
As a result, he stressed that many businesses would regard breaking even as a success.
Speaking on The Rest Is Money podcast, Kerridge said he had closed his own big event company before Christmas and admitted his established Michelin-starred pub, the Hand and Flowers in Marlow, was only just eking out a tiny profit.
The chef said if he wasn’t involved in a range of interrelated business around food, which includes books and TV, he’d now be ‘absolutely terrified’ if he was relying on a restaurant only.
Tom Kerridge opened the Hand and Flowers in Marlow in 2005 and runs it with wife Beth Cullen-Kerridge. Pictured: Kerridge outside his pub
Kerridge at his two-Michelin star Hand & Flowers pub in Marlow, Buckinghamshire. Pictured: Kerridge with a plate of his ‘Real Baked Beans’ inside the pub
Kerridge (pictured) said many businesses would regard just breaking even to survive the next two years as success
The former Bake Off: The Professionals host also explained that middle and lower price food outlets had been hit by soaring costs, while they have been unable to put up prices for customers struggling for money.
He said: ‘If I was solely just about my hospitality business operating, one of them, can it make money? I would be terrified – absolutely.
‘I’m in quite a fortunate position in terms of personally I’m OK. I’ve worked very hard in this industry and I’ve made money in all different aspects, all from food, I’ve got my fingers in lots of pies.
‘I can move as a business, as an entrepreneur, with books and media projects and other things that are going on.
‘But if I was a sole operator of one single restaurant, I would be absolutely terrified. It’s very, very scary right now.
‘It is the huge amount of rising costs that are coming in behind the scenes even now, and there is no singular point where you can manoeuvre.
‘It used to be the cost of veg oil has gone up, so you’d change what you cook with, or the cost of a particular type of meat or produce, you can change that.
‘Or cleaning products have gone up. You can try and make the margins.’
He added: ‘It’s everything. Because it’s everybody’s business – the guys that produce and supply the cleaning products, the fish guy, the butcher, the veg guy, the farmers. Everything that comes into your business has gone up.
‘But we cannot put those prices (up). Everyone’s holding off as long as they can, putting prices on to the guests, the customer that comes through the door, because the customer has also got less money,
‘Mortgage rates have gone up, so every month you’ve got more and more people that are having to spend more money. Their disposable income is being eaten away whilst their bills have gone up.’
Asked if he’d squeezed his profits as inflation rocketed, he said: ‘Exactly. I think most operators, every operator, will be going ‘I think if we can make the next two years and we just break even and survive, we’re in a good space’.’
The chef indicated his involvement in a range of interrelated business around food had saved him
Kerridge said his gloomy outlook was based on him being involved with all price levels, where they are all feeling the pinch.
The chef continued: ‘We’ve gone from having a big event company and a two Michelin-star place and pubs that do burgers and steaks, and we’ve got a lovely, beautiful bistro style London dining room in a five-star hotel.
‘We’ve got fingers across the board of understanding what’s happening everywhere, and the big event company we’ve closed just before Christmas. It’s been operating for about five or six years.
‘We’ve no debt but the energy levels it takes to make that work is so huge. There’s not enough future business I see coming through.
‘The two-star place, The Hand and Flowers, is established. It’s been there 19 years, it has a very weighty punchy price point that covers costs and operates just about at a profit with investment in buildings and properties to stay at.
‘Because it’s got that reputation that’s still strong. Celebrations – everyone’s got a wedding anniversary or a birthday every year and they’re celebrating spending the money in that space.’
He added: ‘The middle and the lower ground is where it’s very, very difficult because it’s a huge market space. There are a lot of people out there that are competing for it.
‘Eating out isn’t cheap, even if you’re going to a high street pizza place – a family of four will still spend £100 on a Tuesday night and that’s a lot of money.
‘So that price point is quite difficult to start attacking and you can’t put any offers in because of the costs.
‘When you’ve got a low price point you have to have volume, but if the volume isn’t there because everybody’s fighting for that market space, that’s the one that we’re finding we’re struggling with – that’s the one that is most difficult right now.’
Kerridge went on to say that if food businesses of all scales go under then the knock-on effects would be huge.
He said: ‘It’s been a really difficult period. Post-pandemic it’s been incredibly hard and I think moving on from that there’s been a cost of living crisis and global effects of Russia and Ukraine, and how that effects not just energy prices and food.
The Hand and Flowers pub and restaurant run by celebrity chef Tom Kerridge
Tom Kerridge said all of his restaurant outlets were being squeezed to the limit
‘There are so many different influences that are pulling and pushing on businesses across the board, but hospitality always seems right in the middle of it.
‘It’s human physical touch to make it work, it’s humans that come in to enjoy it.
‘And by hospitality I don’t just mean Michelin-starred restaurants, it’s coffee shops and it’s cinemas and the kiosk at the football. They’re all hospitality.
‘But then into that you have a huge amount of other businesses that support it or are part of it, or hospitality supports those businesses. So manufacturing, kitchen design, building, logistics, and then you’ve got food farming, agriculture.
‘It sits in the core of that, and all of those costs weigh heavy into it.’
He continued: ‘And then the only way that hospitality makes money is by selling stuff to human beings who are running out of money. So it’s a really difficult business to be in right now.
‘The cooking is the easy bit. The running of the business, the understanding of the margins. ‘The kind of macros of running a business like that is very, very difficult, and the profit margins, no matter how busy you see your local pub on a weekend or even a top end restaurant packed, the actual margins are very, very small.
‘So unless you’ve got years of understanding that particular type of business it’s very, very difficult to make them work.’
The £35 Fish and Chips located at Kerridge’s Fish and Chips in Harrods, Knightsbridge
Tom’s Saffron & Samphire Fish Pie dish serves four and works out at £15 per head
The famous chef has appeared on TV shows like Masterchef and Saturday Kitchen, and runs eight restaurants and pubs including the Hand and Flowers which he opened in 2005 and The Coach.
He previously came under fire for charging £60 for a ready-made fish pie – that must be ‘finished off at home’.
The pie was part of a range of restaurant meal kits in collaboration with Dishpatch, who deliver the pre-made meals to customers doors.
It serves four and works out at £15 per head, and there is another option available for two at a total of £38 or £19 per person.
Last summer, the chef was slammed for selling pricey fish and chips while the country battles a cost of living crisis.
Kerridge’s chippy dish was up for grabs at Kerridge’s Fish and Chips, located at luxury department store Harrods in London. But the budget-busting price will get you one battered fish and about eight chips.
Defending the price, Kerridge told Radio Times the sourcing and preparation of the fish and potatoes is different from your usual chippy because it’s ‘bespoke dining’.
He said that people criticise him because he’s ‘seen as a man of the people’, but that they ‘don’t understand’ the pricing structure.
