The UK’s top 100 restaurants made an £82m loss in the last year, down from a pre-tax profit of £102m 12 months ago, research by accounting firm UHY Hacker has found.
Furthermore, pre-tax profits at the UK’s top 100 restaurant groups have fallen from £345m since the first quarter of 2017.
The huge loss in profits has been caused by a number of restaurant chains going through restructuring in order to shut loss-making branches. The cost of that restructuring has incurred short term cash costs such as funding staff redundancies, exiting tenancy agreements and terminating contracts with suppliers.
Of the top 100 restaurant groups, 48 are now loss making up from 37 last year.
Peter Kubik, partner the UHY Hacker London office, said: “Restaurant groups are having to undergo radical restructuring surgery just to stay afloat. Cutting down the number of branch chains is financially stressful for restaurant companies but in the long term it is essential they get to the right size.”
“Despite the gloom, there are a number of restaurants success stories which can give the sector some hope. For example, Nando’s, the South African restaurant chain recorded bumper sales last year, as it continues its global expansion and Wagamama has completed a successful sale.”
* Company accounts filed with Companies House as of March 31 2019, compared with accounts filed in 2018