Recession leads to closing down of Indian restaurants in UK
March 6, 2009
London (PTI): Economic downturn has led to the closing down of nearly 150 Indian restaurants which tickle palates across the UK and urge the Labour government to come to their rescue.
As more such shops are likely to be shut in the next few months, the Indian restaurant industry has urged the government to come to its rescue in the same way it supported struggling banks and the car industry.
The industry has also sought the scrapping of VAT as one of the measures to revive the struggling restaurants.
Enam Ali, chairman of the Guild of Bangladeshi Restaurateurs, said about 140 Indian restaurants across Britain had closed since Christmas.
“A major part of the problem is the big drop in sterling against the currencies of India and Bangladesh where many ingredients come from. In uncertain times people don't go out for meals as much, even if they still have the same income, because they are worried about the future,” he said.
Amidst job losses in various sectors, there has been a sharp decline in people eating out in Indian restaurants and pubs. Several pubs have also closed down in the recent months across the country with people preferring to imbibe alcohol or entertain at home.
Besides falling number of consumers, Indian restaurants have also been hit by higher prices of ingredients and tougher immigration laws that make it difficult to recruit chefs from the Indian sub-continent.
Among the worst affected are Indian restaurants in Leicester, a town in the east Midlands with a large population of Indian origin. Restaurant owners have petitioned Labour MP Keith Vaz, for help resolve immigration issues and to urge the government to scrap VAT to revive their business.
Abu Taher, owner of T&K Balti House, told the local media: “Business is down by half and if it keeps on like this with no-one coming out to eat, we cannot survive more than six months.
“Meanwhile, the price of foods – rice, chicken and lamb in particular – has doubled. In this difficult time, we urge the government to abolish VAT for small businesses to invigorate the sector and safeguard the livelihood of thousands.
“If the Government doesn't do something then small businesses will not survive,” he said.
Syed Rahman, of Cuisine of India, said: “All our costs have gone up since last year. We're not as busy as we were because people are worried about their jobs. It's a really dreadful situation and we fear there is worse to come.”
Restaurant owners such as Sunny Kanda have been struggling to deal with the crackdown on foreign workers last year that made it difficult to recruit chefs from the Indian subcontinent and keep existing ones.
Kanda, who owns Saffron Spice, said the restaurant could be closed within six months. He said: “Since I took over it's gone from being busy on weekdays to being dead, and weekend trade is also down.
“Business is almost half what it was and I'm spending money on lawyers to keep my chef because of the visa clampdown.”
Liz Hall, head of research, at Price Waterhouse Coopers, said, “The UK love affair with eating out and staying in hotels has been put on hold – but for how long we do not know.
“Personal and corporate belts have now been severely tightened and this has led to a significant reduction in revenues. Of course, as in previous recessions demand will one day recover.
“However, we do not know how many cold, dark winters and long, wet summers lie ahead for UK pubs, restaurants and hotels before they play their part in an upturn.”
There are few takers for 'chicken tikka masala', dubbed as Britain's national dish and other spicy flavours as many people affected by job losses and credit crunch are preferring to cook at home or buy readymade meals from the supermarkets.
Leicester-based Sudha Vemuri told PTI: “I think twice before offering my child a special treat. People now have less disposable income, not only Asians but also others. Naturally, many Indian restaurants and Indian shops here are suffering.” Abdul Miah, owner of an Indian takeaway in Bristol, said, “It's a bad time for us all”.