IF YOU’VE wined or dined in the United Kingdom (UK) lately, you may have noticed a sly increase when the check arrives: Higher levels of gratuities are being built into tabs, and there’s further pressure to give even more.
From computerized demands for additional tips to new per-person cover charges, the price of eating out while rewarding servers is on the rise. Automatic service charges added by restaurants — once a mere 10% of the total bill (and theoretically optional) — are steadily climbing, too. A 15% surcharge is not unusual.
This comes as diners in cities such as London are paying more than ever for food. The average price of a restaurant main course rose 11% as of July, compared to the same period a year earlier, according to data from the Office of National Statistics. And with labor shortages squeezing margins, restaurants are increasingly hoping that augmenting tips will help keep staff from walking off the job.
This, in turn, is fueling a wider debate on who should bear the higher costs of employing staff. Have servers become 5% better over time? Or are diners being asked to take on an American-style system in which tips are an integral part of a worker’s pay?
“When the guy opens a bottle of wine, where do the extra percentages go? Does it mean he has more skill or training?” asks Sam Harrison, owner of Sam’s Riverside & Sam’s Larder. His restaurants levy the now-standard 12.5% service charge. “What worries me is: It could have a negative impact if people cut back and don’t go out as much for what is a very short-term fix.”
WHAT HAS ‘NORMAL TIPPING’ BECOME?
While etiquette and travel guides say that tipping is the norm across the UK, surveys tell a tighter-fisted story. Only 53% of British diners said they “always” or “often” tipped their waiters or servers, according to a YouGov survey in late August. That’s down from 63% in 2019. Pub staffers fare worse, with the figure dropping to just 3%.
To be sure, British diners aren’t necessarily being stingy. Where servers in the US tend to rely on tips to provide a living wage, almost 70% of survey participants in London view the technically optional “service charges” as a gratuity — although trying not to pay one is likely to cause a scene.
The problem is that restaurants, diners and servers face a perfect storm. Rising costs for ingredients, energy and staff mean eateries are making lower margins, even as customers are being scared away by prices. And while some white-collar workers can escape the pressure from UK rents rising at the fastest pace in 18 years by moving away from cities, the nature of waiting on tables means the workers can’t leave.
That’s made tips more vital than ever for many UK workers, even though their minimum wage far exceeds those in the US. About 7% of UK workers receive tips as part of their work, according to government figures, and research suggests that hospitality workers are often paid well below what they deserve.
Tips “are the difference between a minimum wage waitress being able to keep their head above water in the current financial climate and not being able to pay rent or buy food,” says Bryan Simpson, a lead organizer at UK and Ireland-based union Unite Hospitality. Yet “the acute rise in the cost of day-to-day essentials, from rent and energy to food and travel, has had a negative impact on the tipping habits of customers, particularly in the casual dining market.”
For many restaurants facing rising costs and angst-filled diners, the answer has been to ramp up optional fees, from issuing higher service charges to asking some diners for a separate tip when they pay the bill via an electronic option on a point-of-sale terminal. A night out at The Wolseley, Socca Bistro, or Japanese eatery Koyn comes with a 15% service charge. Dovetale, a new high-end eatery in London’s upmarket Mayfair district, asks for that and a £5 ($6.34) cover charge per person. It’s easier to recruit staff with the promise of higher variable wages.
“To me, that lacks the fundamentals to what restaurants are all about — which is hospitality,” says Mr. Harrison. He views maintaining service charges at levels diners expect, while keeping staff happy, as vital to keeping the industry afloat. “Ready meals and frozen meals numbers are increasing month on month, as are delivery services — and that’s what we’re competing against.”
For Emanuele Mensah, co-founder of bar consultancy Liquid Nation and a finalist in Diageo’s competition for World Class GB Bartender of the Year 2023, tips and service charges are genuinely optional, a way for customers to thank staff for a good night out. Even so, he adds, the charges have become crucial and can represent 40% of a worker’s take-home pay.
While most patrons expect such levies to go straight to staff, that’s not always the case. At some establishments Mensah has served, operators took half for themselves — a trend that recently passed laws are designed to stop.
NO EASY SOLUTION
Sylvia Allegretto, a senior economist at the Center for Economic and Policy Research, warns that adoption of high-tech payments in lieu of cash is driving angst about tipping around the world. Where paying with cash returned coins you might happily pass to a server, electronic options require more effort — and even potential embarrassment when others are waiting. How do you let servers “keep the change” when you’re paying with the tap of a watch?
Ultimately, something will have to give. Ross Carter, chief executive officer at the Drinks Trust, a charity for people who work or have worked in the beverage industry, says demand for its well-being and counseling services looks set to increase 75% this year, compared to 2022, while requests for financial assistance are at record levels.
Even if diners grudgingly accept higher service charges and demands for tips, Carter doubts that drinkers will be willing to do so because of cultural norms and attitudes. Tipping at British pubs has long been more of an ad-hoc process, wherein customers occasionally let staff “buy” a round for themselves or keep the change from cash notes. This means that better pay to help workers cope can come only from higher prices.
“If the industry wants to keep the staff and staffing levels and the quality of staff, there’s little other option than to compensate them competitively,” he says. “An increased level of cost it will have an impact on demand — and sadly, the outcome may be that there will be even fewer operators.” —Bloomberg