Costs of business and rates increases are putting restaurants and coffee shops out of business, the Supermac's founder has said. 

The fast food chain Supermac’s is opening up an outlet in Dublin airport while profits for last year sit at 28% - but the chain’s owner is concerned about staffing and business costs.

Supermac’s founder Pat McDonagh told Breakfast Business he has seen five restaurants and cafés close in the last fortnight in Galway.

“At this time of the year, it shows you how seriously people in the hospitality industry are affected,” he said.

Mr McDonagh said he would be “very careful” around pricing in Supermac’s because according to the founder, “you can't put up prices to cover all our costs”.

"Challenges out there are growing"

Mr McDonagh said Supermac's has “had a good year” with a few investments that “also came good”.

The business man expects the profits for next year to be “a bit lower” due to rising costs of business but said he thinks the restaurant chain will do “pretty well”.

“The business challenges out there are growing, whether it's costs in relation to energy or food or rates of wages, insurance, etc., those are continuing to grow and these are the ones that are hard to control,” he said.

“Even professional costs, legal and accounting costs have grown dramatically over the last two years.”

Mr McDonagh said energy costs have retreated for the business “but nothing to where they were five years ago”.

“Before Covid-19, we were paying 14.5 cents a unit for electricity, it’s now 24.9 cents per unit,” he said.

“It doesn't look like it if it's going to retreat much further and that's a serious cost.”

"Understand the situation"

In the new Government, Mr McDonagh would like to see people who will “understand the situation out there on the ground”.

“You have two economies working in Ireland – you have the one inside the M50, and you have the one outside the M50,” he said.

“The outside of the M50 is struggling a bit more than that inside the M50, because a lot of the activities that happen - the big concerts, conferences, whatever events, matches, etc. - happen inside the M50 and therefore they're in a better situation than those outside.

“So, I hope that they put somebody in charge who really understands what's happening on the ground out there and listens to business people and listens to what's happening.”

“We have a great country,” Mr McDonagh said – but he emphasised that Ireland has issues as well as “a lot of opportunity” with “the right leadership”.

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Supermacs. Image credit: Leah Farrell/RollingNews.ie