A restaurant makes £3.3 million in profit but still needs to turn off heating to save on costs?
- TBA
- Apr 3, 2024
- 4 min read
Updated: May 29
You may have heard of the internet sensation ‘Salt Bae’, who opened the restaurant Nusr-Et in Knightsbridge back in September 2021. The restaurant quickly became known for its extravagance and extremely high pricing.
Despite this, the restaurant recently announced that it would be turning off its heating to save on operating costs!
1. Rise to fame
Nusr-Et, located in Knightsbridge, is famed for its expensive and over-the-top dishes. Of course, the main credit for the sudden fame of the restaurant must go to the founder Salt Bae himself.
Salt Bae’s real name is Nusret Gökçe. Originally from Turkey, he worked as a butcher and chef before quickly becoming an online sensation in 2017 after a video posted on social media went viral. His signature salt-sprinkling pose netted him over 48 million followers on Instagram alone.
Besides from ordinary citizens, even international celebrities such as David Beckham and Leonardo DiCaprio were eager to take photos with him. That is not to mention British celebrities like Coleen Rooney and her husband Wayne, Gemma Collins, Sam Thompson, and Zara McDermott, who have all visited the restaurant to experience the hype.
Along with his skyrocketing wealth, his business has also expanded into over a dozen restaurants worldwide. Patrons go not only for food, but to see the man himself.
The restaurant has also attracted its fair share of negative publicity, especially the gold-plated menu of food items. One customer even uploaded a photo of their bill showing that four people had spent £37,000 on a single meal the restaurant.
Of course, some people believe that any publicity is still good publicity, and it certainly worked out in his favour when it came to social media – the restaurant in itself became an internet sensation, with many wondering whether the food was really worth the price!
2. How much does the restaurant really make?
We’ll focus on the Knightsbridge branch of Nusr-Et.
According to the accounts submitted to Companies House, the restaurant’s pre-tax profits increased by 44% in 2022, reaching nearly £3.3 million. Sales soared by nearly 66% with a turnover of £13.6 million. As a result, Salt Bae himself received £2.7 million in dividends, up nearly £2 million from the previous year.
However, despite the huge profit, it seems that the restaurant, along with many others, must adapt to changing economic winds.
Due to soaring energy bills, the Knightsbridge branch announced that it would shut down all heating during non-peak periods and turn off lights during non-opening hours in an effort to save on operating costs.
Besides from this, they also limited the operation of the restaurant’s ventilation system and embarked upon a renovation to install energy-saving insulation materials and LED lights across the restaurant.
The extravagant menu has also been toned down – the £1450 golden steak has been replaced with a £45 burger and fries set. In addition, guests can now also enjoy a lunch menu from Monday to Sunday between 12-5pm, which includes appetisers, main courses, and desserts for £39 per person.
They also now offer a range of new ‘affordable’ sushi, priced between £23 and £28.
3. How should restaurant owners save on costs?
The cost-of-living crisis has also undoubtedly affected businesses. Even a high-end restaurant with record profits such as Nusr-Et is seeking to cut their operating costs.
So, what should restaurant owners do?
Analyse ingredient costs:
A crucial part of running any catering business is analysing your ingredient costs to ensure that they do not exceed your budget. You need to strike a balance between quality and cost – it may be beneficial to pick a local supplier, who are typically cheaper.
Negotiate prices:
Negotiating with your suppliers is fundamental to any cost-saving strategy. Be sure to reach out to several suppliers – this will give you an edge when it comes to negotiating. You can not only decide based on price, but also quality and reliability. You’ll find that a lot of suppliers will be willing to lower their prices if you’re willing to cooperate with them in the long-term.
Optimise your menu:
Menu optimisation is another important way to reduce operating costs. However, optimizing the menu does not mean blindly reducing items, otherwise, customer satisfaction will decrease, and reducing items is equivalent to reducing profits.
You can focus the menu on specific items that have been proven to be profitable and high-profit, retain these items, and then reduce some potentially unpopular ones.
You can also arrange different types of dishes at different times of the week. At the same time, you can also use some restaurant menu templates to reduce costs related to menu design, printing, and materials. Planning inventory based on expected demand helps reduce food waste.
Expand your online orders:
Through digitisation, restaurants can eliminate manual data entry and therefore reduce labour costs associated with telephone ordering. Using an online ordering platform outsources these costs, and also gives you access to online promotional tools, meaning that you can save further on what would otherwise be expensive print advertising and traditional marketing methods.
By utilising online ordering platforms, restaurants can better control operating expenses, making business more profitable.
Save on energy costs:
Installing smart meters can help you monitor energy usage and accurately identify high and low-energy periods in your business premises. Once you understand how energy is used and when, you can customise your electricity usage based on business needs, and time-of-use electricity prices can help you use electricity when it is cheaper.
If you have high-energy devices that can be set to run at night, such as dishwashers, heating, and cooling systems, off-peak electricity prices at night could help you save you some costs.
Low-water-use dishwashers, toilets, and faucets with air inflatable devices can also help reduce water consumption. Of course, you can learn from Salt Bae and turn off the heating system and switch to more energy-efficient equipment.
Reduce taxes:
Tax is a complex area that is constantly changing.
Here’s where TB Accountants can step in. Get in touch with us for a consultation, and we can discuss how best to lower your tax liabilities. We’ll help set your business on course for maximised profitability.
For individuals and businesses looking for UK taxation services, use our contact form to get in touch for more information.
Get in touch with us at info@tbgroupuk.com or for a free one-to-one consultation.
