Is there any hope?
hospitalitytoday. com | 15
Restaurants can seek to alleviate these increases by appealing to the Valuation Office Agency – there are limited grounds for appealing against the rateable value if you feel it has been incorrectly calculated. Under the new regime, there will be a simplified procedure in place which means appeals can be carried out more quickly but on more limited grounds. Most big commercial property agencies deal with appeals on a no-win, no-fee basis.
Their clientele is also better able to bear the cost of higher prices on menus.
It is those in the mid to lower market, and those with smaller profit margins such as burger and pizza chains, who may suffer most.
What might happen next?
We may see a trend of accessible eating outlets being driven away from central London, and expanding to the regions. This type of outlet needs high turnover, and putting up prices on menus will discourage customers, who go to them for reasonably priced meals.
Conclusion
The government says that three quarters of businesses will see no change and in fact 600,000 companies will have their rates cut. However, there will be no rate cuts in greater or central London, where restaurants are performing a balancing act between higher overheads and tighter profit margins, leading many to consider the benefits of downsizing or relocating to the regions. Will these increased rates leave the centre of London deserted, save for hordes of Deliveroo drivers?
So, it’ s likely that these restaurants, in the mid to lower end, will consider moving to areas where the business rates are lower.
The gig economy will also profit, especially takeaway services such as Deliveroo. This online food delivery company will benefit because it doesn’ t just collect from restaurants, it has kitchen units on the outskirts of London where the rates and overheads are lower.