What is the influence of Brexit on the sales of the restaurant business?

Introduction

This study explores the overall impact of the post-Brexit period on the restaurant and culinary industry of the UK. To determine how the 2016 Brexit initiative affected the labour access of the ethnic restaurants in the UK. The costs of operation, and ingredient costs utilised by the ethnic restaurants and the potential additional factors that impact the success of ethnic restaurants in the UK post-Brexit. In particular, the study explores the existing policies on food and ingredient pricing and related operational dynamics. Such as the immigration policy to determine their impact on the profitability and talent recruitment from outside the UK for the ethnic restaurants in the post-Brexit era. The paper then highlights the political and economic realities and the governments’ role in the UK post-Brexit. Whilst exploring potential new arrangements of trading to support the players in the culinary sector through fair food and ingredients pricing and suitable policies as the core of the practical recommendations from the research.

Background of the Study

Brexit connotes a British Exit abbreviation was a referendum conducted in the UK to discuss contentious issues experienced by the members of the public on 23^rd June 2016, as explained by Ranta and Mulrooney (2021). At the core of the Brexit debate was a central question that was presented to the British public which sought to determine whether to remain or exit the European Union (hereafter “EU”). With the results of the referendum reported at 51.9% of the voters who turned down the initiative to exit the union (Ranta and Mulrooney, 2021). The UK had operated as a traditional European Union member from 1973, with the partnership contributing to a significant strengthening of security, employment, and immigration laws, human rights, and its economy (Benton et al., 2019). The withdrawal process of the UK from the EU was perceived as a major adjustment that would bring wide-reaching ramifications not only for the UK, but also the other twenty-seven member countries of the EU (Datta et al., 2020; Ranta, 2019). Arguably, the implications of Brexit are considered more extensive within the restaurant and food industry than other sector, as reflected in numerous opportunities as well as the challenges arising in the post-Brexit era (Sandercock, 2020). For more than five decades, the food or restaurant industry of the UK has operated based on its interdependence and intricate connection to the membership of the country within the EU, as captured by Datta et al. (2020). For instance, the restaurant industry of the UK is guided by complex policies on labour, food, agriculture, and pricing of commodities and other related regulatory policies in the UK (Garthwaite, 2016). Moreover, the restaurant sector is further governed by standards of the EU in issues of recruitment of talent or employment of immigrants, environment, quality, and food safety policies which the players within the industry must observe, as explained by Garthwaite, 2016). Other regulatory aspects include the tariffs and the trade agreements of the EU, which govern the conduct of the players in the culinary sector (Ranta, 2019). Therefore, the pricing of food and related ingredients depends on a complex interplay of factors such as the regulatory framework, the conduct of different factors within the EU and UK market. Who provide the required food for profit as well as the diverse demands of the customers regarding the various prices and food types. Overall, the restaurant sector of the UK depends on the economy’s strength for its survival. It is highly impacted by factors such as the inherent capabilities of the customers to pay for the food or ingredients, the rates of currency exchange and issues of inflation (Springmann and Freund, 2018). Springmann and Freund (2018) further captured the concerns in the restaurant sector of the UK post-Brexit. Including the potential problem of reforms in areas of safety, food and ingredients pricing and food prevalence due to the institutional and economic barriers. The post-Brexit challenges include increased pressure on the players in the restaurant industry due to structural, operational and policy challenges arising within the niche (Datta et al., 2020). Consequently, in the post-Brexit period, the UK requires to tailor its food and restaurant policies in a way that supports its domestic trading arrangements.

The controversy surrounding the restaurant sector in the UK post-Brexit represents a series of major concerns regarding how Brexit potentially impacts the lives of ethnic restaurants (Woodcock, 2022). For example, according to Food Foundation (2016) and Ranta and Mulrooney (2021), the concerns include the high costs of operation and production. This due to the increase in prices of foods, the adjustments in the legal entry border requirements, or deportation issues, especially for the players within the restaurant business. Brexit, a movement characterised by increasing anti-immigration pronouncements. Presents significant challenges to the ethnic restaurant workers under the immigrant’s category who form part of the UK’s hospitality industry players, as explained by Lang (2020) and Millstone et al. (2019). The changes in the laws governing immigration that adversely impacted the immigrant workers within the restaurant niche of the UK include the provisions of the 2014 Immigration Act. Which imposed restrictions on renting of premises to the migrants by the UK landlords. The report from Farmers’ Weekly Opinion (2018) supported this observation contending that the entry into office of the Conservative Party further encroached the spaces of businesses such as the ethnic restaurants and families within the UK post-Brexit. Therefore, the changes in the legislation (Immigration Act of 2016) under the stewardship of Theresa May as the then Prime Minister. Contributed to the negative experiences of the non-EU migrants and the ethnic restaurant owners within the UK (Lang, 2020; Millstone et al., 2019).

Sandercock (2020) captured the state of the UK hospitality industry post-Brexit, contending that the country is largely in limbo due to the lack of clarity and relatively higher costs of operation that lower the profitability. In particular, the culinary industry has at least 37% of the workers who comprise the migrants serving as skilled hospitality workers and owners within the UK (Sandercock, 2020). The 2004 changes within the EU, which led to the expansion of the union and the entry of new member countries of the EU. Overhauled the immigration aspects with the number of workers under the EU-born workers of the UK increasing from 732,000 to 1.9 million by 2015 (Barons and Aspinall, 2020; Benton et al., 2019). Overall, the influx of workers from other countries, which represented at least an additional 60% of individuals from the other countries. Contributed to the discourse regarding Brexit, with the movement gaining momentum as the far-right political factions pushed for changes towards more stringent rules. Therefore, the UK post-Brexit era has led to major uncertainty for employers and workers within the ethnic restaurant category, with the restrictions negatively affecting their businesses.

 

Aim and Objectives

The study’s primary objective is to identify the implications of the UK post-Brexit on the restaurant and culinary industry of the UK. The specific objectives of the research include the following:

• To identify the impact of Brexit on the labour access of the ethnic restaurants in the UK;
• To determine how Brexit has affected the costs of operation and ingredient costs utilised by the ethnic restaurants;
• To determine additional factors that impact the success of ethnic restaurants in the UK post-Brexit.

Research Questions

• What is the influence of Brexit on the sales of the restaurant business?
• Which factors affect the operational dynamics of the ethnic restaurant of UK and EU’s food in situation post-Brexit?
• What are the solutions to decrease the challenges of post-Brexit on ethnic restaurants within the UK?