The closure of Michelin recognised Circa in Terenure earlier this month, sounded a klaxon of danger within the Dublin psyche.

It went against the belief that the French guide, first started as a way to sell more tyres for the titular company, and which awards excellence, can inoculate establishments from going to the wall. 

Hammered by the public health restrictions brought on by Covid-19, massive staff shortages, soaring energy costs, inflation and a cost-of-living crisis, it seems that neither plaques, recognition or customer favour, will be enough to save some establishments. 

One restaurant is closing nearly every day now, according to the Restaurant Association of Ireland, and there is a widespread sentiment that a tidal wave of closures and insolvencies is en route for the sector.

“It is just about survival”

Damien Grey

For many, the Covid-19 supports put in place by the government during the worst of the pandemic have kept the wolf from the door and there are calls for those measures to continue in order to sustain what have become unviable businesses in the current economic climate.

With this chaos, and the accompanying stress for restaurant owners, in mind, Damien Grey, one of Ireland’s most vaunted chefs, and one who successfully evolved his business model multiple times over the pandemic, tweeted out an offer of support and mentorship to anyone that needed it. 

The response however, was muted.

“If you are in trouble the best way to get the ball rolling is to talk to someone, to try to fix the problem. A lot of people are too proud to say that they are in trouble or to ask for help,” Grey told The Currency podcast. 

“It is just about survival, a lot of businesses think next month will be okay, but it won’t because the same engine is running the boat.”

Despite hundreds of retweets and general adulation from the Twitter community not a single proprietor got in touch.

Grey perceived the silence as a matter of pride from other owners, an unwillingness to open up their books to a competitor. But it’s also an indication perhaps of just how stressed and afraid people are, and how drastically the next twelve months could see the sector transformed.

The bottom line

“You should be balancing figures every day, you need to do it daily and if you don’t, you are going to lose control of your business.”

In the Michelin Guide’s review of Liath, it describes an Alice in Wonderland enclave inside of the “rustic market” that is Blackrock’s collection of souk-style stalls. 

It is both “cosy” and “magical” and the setting for “bold, original dishes centred around the five tastes – salty, savoury, sweet, bitter and sour – which come together in perfect harmony.” 

Grey is the mind behind this approach to fine dining which does away with the pernickety fuss and reverence typically associated with Michelin constellations, and instead focuses on fun and creativity.

But it is all too easy to get lost in the artistry that drives Liath and to forget what is really going on here; in fact, it often seems that chefs and restaurateurs want you to forget, but not Grey. 

” A restaurant is a business, a business makes money”

First and foremost Grey is a business person. It is a mistake, he says, not to think of a restaurant as a profit-seeking business; he says it’s seductive to think only of the great food and hospitality and to forget that the bottom line is what really matters. 

“I remember my first boss saying to me, ‘you must understand the numbers before you understand the food’. I laughed and said, ‘shut up ya’ old boot, you don’t know what you’re talking about’. The penny doesn’t drop until twenty years later,” Grey said. 

“The reason I keep saying that restaurants are a business is because when you hear restaurant, you don’t hear money, but a restaurant is a business, a business makes money, someone opens a restaurant to make money.

“The word business is the core line here, you can’t expect to open up a restaurant, without achieving your bottom line, you must achieve that.

“You should be balancing figures every day, you need to do it daily and if you don’t, you are going to lose control of your business.”

Grey, who is religious in reading the news and checking the stock exchange and global markets, is a firm believer that every restaurant owner should do a business course and that acumen is needed to be in the 12 per cent of restaurants that make it past their first five years. 

“For instance, they are saying that inflation should start to make a difference in the last quarter of next year,” Grey said.

“So for me being a simple person, I am saying to myself, maybe the price of things is going to start coming down then. That means I have nine months where I have to weather a storm, so I am thinking about what savings can I make, what changes can I make, to make sure I can break even.

“If we can break even through this storm, brilliant and then when the storm is over, we focus on profit again. The business making money again. That is how I am approaching it.”

The basic traditional financial model of a restaurant is; 30 per cent on staff, 30 per cent on supplies, 30 per cent on overheads and 10 per cent profit. 

But that model “never works”, as Grey puts it and it is staff and their wages that too often take the hit.

“People are starting to realise that if you want people to be paid well, it is actually the customer paying their wages, not the employer,” he said.

It is something he discusses at length in the podcast interview, the balancing of a customer’s perception of value for money and paying staff what they are worth.

Denial is your enemy

The cost of energy, which has ballooned for individuals and businesses, is disastrous for restaurants that are already struggling and the crisis facing the sector now seems existential.

“There is no short answer to it, other than tighten up every way you can, reduce your costs, turn your lights off, try to go at it with some sort of defence,” Grey said.

“Don’t wait for the government because they are going to drag their feet on this one because it is a very political issue. It is the small things that do make a difference.

“If you have to start reducing the team, then do it. But be honest, work with them, find them new employment, get them another job. You never know you may need them again. 

“People don’t like doing it because it is a horrible thing to do but it is a business. You have to make horrible decisions as a business operator but you can do them with integrity.”

Mounting a defence against the storm and riding it out successfully will not be possible for everyone, and Grey, like others, anticipates a bleak time ahead for many owners. 

Bookings for his own restaurants have slowed, and despite the Irish spending 14.4 per cent of their household expenditure, double the European average on restaurants and takeaways, the cost-of-living crisis means people will inevitably reduce their spending on hospitality.

“There will be a lot of closures. What happens when a restaurant closes, people get hurt, the farmer gets hurt, the fisherman gets hurt, the staff, the landlord, everyone gets hurt when a restaurant is forced to close,” he said.

“Denial is always your worst enemy but if you are serious about business and serious about running a restaurant, you have to make the decision when the day is up, the day is up, but go out with your head held high.

“If you do it properly and you close it properly, you will simply be able to go back the next day and have another go but if you burn bridges and wreck your credit ratings. it is going to be a nightmare to get it up and running again. 

“Don’t get me wrong I would be gutted if I had to close Liath. I would be devastated, but I would make sure that it was done in a way that I could come back.”

Grey is astute in restructuring a restaurant’s offering depending on the climate and the market and goes in-depth on how he has done it multiple times, in the podcast interview.


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