Anyone who has undertaken a long car journey across the South of Ireland will be familiar with a certain US president-themed petrol station on the side of the M7 motorway: Obama Plaza. Beside two grinning, life size bronze statues of Barack and Michelle Obama, a carsick man can be seen hurling on the pavement and a family of five march back to their car, fillet rolls in hand. The Obamas are thrilled by this honour. When my friends and I stopped there on our way back from a certain camping experience on the dunes of Inch earlier this month, in an extreme state of fragility I paid €15 for a 10’ Papa John’s pizza. My friends splurged in similar ways at Supermacs and Spar. US presidents aside, I would hate for this to become a normal dining experience.
According to the Restaurants Association of Ireland (RAI), over 600 restaurants, cafes, and other food businesses have had to shut their doors since September 2023, when the Covid VAT rate of 9% reverted to 13.5%. In January 2023, just 18 businesses in the food industry closed, whereas 101 closures were recorded during the same month this year. The VAT increase is just one of many challenges facing businesses in the Irish food industry. Soon after budget 2025 was released, I sat down with Dairíne McCafferty, director of the family-run, vegetarian restaurant Cornucopia on Wicklow St, to discuss the current challenges facing independent businesses in the industry, and which threaten to diminish the vibrancy of Ireland’s food scene.
VAT increase:
It’s noon on a Friday and the bright upstairs of Cornucopia is already bustling with customers. The wooden floors and Georgian style wallpaper give it a cosy feel. Under the sound of clinking cutlery and the aroma of fresh food, Dairíne and I talk about VAT. “We’re under the same VAT umbrella as hotels,” she tells me. The difference is that “just like Ticketmaster has done with tickets, [hotels] can raise their prices to make their margins at certain times during demand, but we can’t do that.
“People aren’t willing to pay for food at inflated prices. You’re on the frontline of inflation. Eating is something so inherent to people and then when it becomes something unattainable to them they become upset. When people are hungry they’re emotional. It’s an emotive time.” In some countries, customers can see how much of what they pay is going to the government because the VAT is added to the price of an item at check-out. In Ireland however, VAT is already included in the price. “People just see that things have gotten more expensive. Customers don’t see that it’s the government charging you more money. The expectation is that we should absorb that cost rather than put it onto the customer, which puts businesses under more pressure.”
High utilities:
The VAT increase is just one hurdle amongst many. “Before the war in Ukraine, our electricity bill was €6,000 for two months. It then jumped to €20,000. Now it’s at €12,000 for two months. All the energy credits that were there [during Covid] are gone.” For small independent businesses, especially those starting out, this cost is just not feasible.
Less people in the city, higher rent and rates:
Also, with so many people now working from home, the “footfall in the city centre has fallen by 20%.” Yet rent has increased as well as the rates for businesses located in Dublin’s inner city. “In Paris, the local authorities didn’t want the city to just become loads of chains on the mainstreet, so the government bought buildings and rented them back to independent businesses at reduced rates, so that there wouldn’t just be a H&M and Starbucks on every corner,” Dairine tells me. “That is not what’s happening in Dublin because it’s all market rent.”
Higher wages:
With the minimum wage increase in the budget, staff wages are also higher which “you never want to resent,” but staffing is a unique challenge of the industry. “Other jobs people can leave and then just have more work to do when they return but for food businesses the work cannot be paused because a staff member is sick or away, you have to roster to be busy. The goal as a business owner is to have less staff paid better but the reality is that you have to have more staff on minimum wage,” to account for when it is busy.
2025 Budget:
I asked Dairíne what she thought of the 2025 budget. “I was shocked. Shocked.” The narrative before the budget was that things would change, clips of Simon Harris circulating about how shocked he was by the closure of small businesses, popular places. “But they just didn’t budge.” Many businesses had been holding out, waiting to hear what relief the budget would bring. As we head out of the busy summer months and into quieter months for the industry, undoubtedly there will be further closures.
“But no one is going to come to the rescue. They keep layering the costs on and it’s completely up to you to find ways of saving money. It’s harder and harder to keep finding ways of cutting down costs and creating new avenues to make money, but no one’s going to rescue you…Capitalism takes no prisoners.”
Advice to other independent businesses starting out in the industry:
Dairíne stressed the importance of being willing to take risks. This job is not like any normal 9 to 5. You don’t go into the business for stability. “The only guarantee in business is that things are going to change, you have to change with it.” You must constantly adapt.
“You have to really like people and really enjoy feeding people and having that kind of hostess mentality. Soft skills are undervalued, but you can get far in life with soft skills.” She sees the minimum wage increase as important for placing an added value on soft skills.
Resilience is essential too. “A lot of restaurants and businesses are running paycheck to paycheck, week to week. Next week is paying for last week. You don’t have this big reserve of money.” You have to be aware of “how much risk you want to take and how much you are going to be able to handle the stress. You have to make a choice of what feeds your soul.”
False narratives:
“I think restaurants, because they’re on the frontline of inflation in terms of putting their prices up, there’s a lot of anger and a narrative about price gouging and ripping you off. I always think restaurants are funny because the staff feel underpaid, the customers feel ripped off, and you as a business owner aren’t making any money so you’re just in a business where everyone feels hard done by.”
A positive of price inflation:
Consumer habits are starting to change. “The plastic bottle schemes, the rise of Depop…everything has value now. We’ve grown up in this consumerist era but as we use up resources things will get more expensive and harder to come by. It’ll be an interesting thing to see how the world has to adapt.”
The effect of closures on the economy:
Independent businesses are the fabric of Ireland’s food scene. According to a recent RAI report, every time such a business closes, the State loses out on a total of up to €1.36m in value each year and 22 people lose their jobs on average. I spent so much on a takeaway pizza at Obama Plaza earlier this month because at the side of a motorway in Tipperary, they’re not exactly faced with competition. We can’t let such places become our primary dining options (even if there is an Obama museum inside). The current economy caters for the existence of such chains over smaller businesses with real life and character. The government needs to act now to protect local food businesses and to fight this closure epidemic.
Concerns for the future:
I asked Dairíne if she is worried by the growing number of closures. “Yes, hugely. What makes Grafton street interesting is its independent businesses. Why would I go to Dublin to just go to H&M and Zara – look, those things are cheap and there’s definitely an avenue for both – but what is the essence of the city? Siopaella, Georges Street Arcade, it’s the independent businesses. If something isn’t done by Dublin city council and the government to support local businesses they’ll become a thing of the past. Just the way that Spar has a monopoly…there’s no local grocers anymore. Everyone goes to Tesco or Lidl, people go there because it’s cheaper and it’s hard to compete with those prices as an independent seller. It’s becoming harder and harder to survive. Everyday, everyday places are closing. People would be shocked to see how little profits these businesses make.”
A legacy to continue:
Established in 1986 by Dairíne’s mother Deirdre O’Mara and her late father Neil McCafferty, originally as a health food store and cafe, Dairine assures me that Cornucopia is not going anywhere. They would sooner sell the family home. “I refuse to let Cornucopia be reduced to an instagram post. I will never. That would be my biggest motivation is to just not to have to reduce Cornucopia’s legacy to a [goodbye] post. Absolutely not. I have another good 35 years of work left in me. We’ll have to survive.”
*Every Wednesday Cornucopia offers a third-off all hot drinks for students.\
This article originally appeared in our print issue of October 2024.
