Analysis: Restaurants are closing on a weekly basis due to rising costs, but Irish consumers are also spending €2.2 billion a year on food delivery
Ireland's hospitality industry faces an existential paradox. The Restaurant Association of Ireland reports that 150 restaurants closed in the first quarter of 2025 due to rising business costs, with almost two-thirds of restaurants reporting a decline in financial performance in 2024 compared to 2023. This is on the back of over 600 restaurants, cafés, and other food-serving hospitality businesses having closed their doors in the 12 months from September 2023, when the VAT rate for the sector was restored to 13.5% from the temporary rate of 9%.
But at the same time, Irish consumers are spending €2.2 billion a year on food delivery. During the pandemic, food delivery platforms and apps emerged as genuine lifelines for the restaurant sector. With prolonged lockdowns forcing the closure of indoor dining, platforms such as Deliveroo, Uber Eats and Just Eat provided significant revenue streams that kept many establishments operational. For restaurants without a pre-existing delivery infrastructure, these platforms offered immediate access to customers confined to their homes, enabling survival during an unprecedented crisis.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
From RTÉ Radio 1's Today with Claire Byrne, why are so many Irish restaurants closing down?
But what began as emergency assistance has evolved into a structural dependency that now threatens the very businesses it once saved. The temporary boost that delivery platforms provided during lockdowns has given way to a permanent transformation of the industry, where restaurants find themselves trapped in relationships that undermine their long-term viability.
The numbers paint a troubling picture of this transformation. With over 8,000 restaurant enterprises in the country facing closures at a rate of more than ten per week, delivery platforms continue their growth trajectory. Just Eat generated over €1.3 billion in revenues across the UK and Ireland in 2023, while revenues at Deliveroo increased from €47.89m in 2023 to €51.98m in 2024. With hundreds of closures in the last two years despite apparent market growth, the question must be asked as to how delivery platforms have transformed from pandemic lifelines into structural threats.
The commission stranglehold
The relationship between restaurants and delivery platforms has evolved into a form of economic captivity. Platforms require commission payments of 25 to 35% per order for listing restaurants on their services, with these commission structures creating impossible mathematics.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
From RTÉ Radio 1's Drivetime, economist Jim Power on the crisis facing the restaurant industry
The restaurant industry has never been a particularly lucrative way to make money, with 60% of new restaurants closing within their first year of operation. The range of profit margins for restaurants typically falls between zero and 15%, with average profit margins usually falling between a slim 3 and 5%. Cost of goods sold and overheads such as rent, rates, and insurance, are relatively fixed and difficult to reduce. Labour costs make up 30 to 35% of total revenue on average in the food service industry, and are generally one of the highest restaurant expenditures.
With a high proportion of immutable costs, restaurants have little choice when it comes to paying the eye-watering levels of commission, but to absorb this cost by reducing labour costs, specifically employee wages. The blunt reality is that average wages in the hospitality sector are now less than half of the average industrial wage in Ireland.
The platform is the brand not the restaurant
A more insidious transformation lies beyond immediate financial pressure. We are seeing the systematic erosion of restaurant brand identity. Post-pandemic eating habits have evolved into a fundamental shift in customer behaviour, where customers increasingly order food from platforms rather than choosing specific restaurants.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
From RTÉ Brainstorm, how the Irish became food delivery pioneers in the 19th century long before Just-Eat or Deliveroo
This shift represents more than convenience as it fundamentally alters the restaurant-customer relationship. Delivery platforms control all customer data—demographics, ordering patterns, spending habits, food preferences—while restaurants receive only basic order information. The platform becomes the primary brand relationship, reducing individual restaurants to interchangeable suppliers in a digital marketplace.
This brand dilution creates long-term competitive disadvantages that extend far beyond commission costs. Restaurants lose the ability to build direct customer relationships, understand their market, or develop targeted marketing strategies.
Some establishments have attempted resistance strategies, placing discount vouchers for direct orders inside delivery bags or replacing platform-branded packaging with restaurant materials. However, these tactics provide limited defence against systematic brand capture orchestrated by platforms designed to own customer loyalty.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
From RTÉ Radio 1's This Week, are food delivery drones providing dinner or disturbance?
Labour market disruption
Platforms operating in the gig economy have created an alternative employment structure that directly undermines traditional restaurant staffing. Food delivery represents an alternative employment option that diverts potential workers from restaurants already facing severe staffing shortages.
At just under €17 per hour, average wages in the hospitality sector are significantly below Ireland's national average of €29.82 per hour, meaning that restaurants struggle to compete with gig economy alternatives offering flexible scheduling unavailable in conventional restaurant roles. This dynamic has contributed to chronic staffing shortages, as an estimated 40,000 workers left Ireland's hospitality industry since the pandemic.
The irony is stark: platforms that depend on restaurant partnerships simultaneously undermine the industry's ability to maintain adequate staffing levels. Recent research has highlighted breaches of basic employment rights within the hospitality sector, potentially driving workers toward platform employment in spite of concerns over the quality of this form of work.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
From RTÉ Radio 1's Liveline, listeners call to give out about sky-high prices in restaurants and cafes
What needs to be done?
The current trajectory requires both industry initiative and policy intervention. Restaurant owners must recognise that platform relationships require strategic consideration equivalent to any major business partnership. This includes developing direct delivery capabilities, creating sophisticated customer loyalty program and collaborating with competitors to negotiate better platform terms.
Industry associations could pursue collective bargaining with platforms. The goal should not be elimination of delivery platforms, but rather establishment of more equitable partnerships that allow restaurants to maintain viable economics and brand independence.
Alternatively, rather than competing individually against well-funded platforms, Irish restaurants could establish a sector-wide delivery cooperative that retains the convenience customers expect while keeping revenue within the industry. Such a system would allow restaurants to maintain direct customer relationships, control their own data, and reinvest delivery profits back into food quality and staff wages rather than platform shareholders.
We need your consent to load this rte-player contentWe use rte-player to manage extra content that can set cookies on your device and collect data about your activity. Please review their details and accept them to load the content.Manage Preferences
From RTÉ Radio 1's Drivetime, do you know how much your delivery driver will make from your takeaway order?
From a policy perspective, options include commission rate caps, mandatory data sharing with restaurant partners, and stronger employment protections for delivery workers that could reduce platforms' competitive advantage over traditional restaurant employment.
What all of this means for Irish food culture
Without intervention, Ireland risks losing the diverse, independently-owned restaurant culture that defines much of our hospitality appeal. The shift toward platform-mediated dining represents a fundamental threat to restaurant diversity and local food culture, as individual establishments become increasingly interchangeable within apps that reside on our phones.
The hospitality sector employs over 250,000 people and represents a cornerstone of Ireland's economy. Allowing current trends to continue unchecked will fundamentally alter this landscape, concentrating power in the hands of global platforms while eroding the economic foundation that supports local food culture and hospitality employment.
The appetite for destruction has been satisfied
The relationship between delivery platforms and restaurants has evolved far beyond pandemic necessity into a structural transformation of the industry. With over half of restaurants expecting revenue declines in 2025 and closure rates accelerating despite apparent market growth, the challenge is to find sustainable models that preserve restaurant viability while acknowledging legitimate consumer demand for delivery convenience.
The economics of current platform relationships simply do not work for traditional restaurant operations. Until this reality is addressed through either industry innovation or regulatory intervention, Ireland's restaurant sector will continue its contraction, with independent establishments bearing the heaviest burden.
The appetite for destruction has been satisfied. The question now is whether Ireland will take the necessary steps to preserve a diverse, sustainable restaurant industry that serves owners, workers, and consumers, or whether it will allow digital platforms to complete their transformation of hospitality into a fulfilment economy.
Follow RTÉ Brainstorm on WhatsApp and Instagram for more stories and updates
The views expressed here are those of the author and do not represent or reflect the views of RTÉ
