Fewer closures but more job losses in casual dining, research finds

Casual dining closures fell by more than a fifth last year, according to joint research from the Altus Group and the Centre for Retail Research (CRR).

Restaurant closures in the sector fell from 1,188 in 2018 to 922 during 2019, whilst total job losses rose by 8%.

A total of 11,280 jobs were lost across the entire casual dining sector in the UK during 2019, up from 10,413 in 2018.

However, in 2018, 622 chain operated restaurants closed, while 337 closed in 2019. The CRR says that the “balance of closures” came from independent restaurants.

Alex Probyn, president of UK expert services at Altus Group, said: “There had been huge growth in the casual dining market but restaurant numbers were still up 16% compared with 2010.

“The race for space pushed up rents impacting on rateable values which came into effect in 2017.

He added: “Extra tax for business rates coupled with rising food prices and staff costs through increases in both the national and minimum wages created a lethal cocktail as margins were squeezed.”

Professor Joshua Bamfield, a director at the Centre for Retail Research, said: “Maintaining quality standards had also proved difficult leading to the need to cut costs caused by the sector’s over-expansion, greater competition and weak consumer demand.”

“The main problems in 2020 are likely to be found amongst the independents, who often lack the resources to reinvest or change their business model.”

Smaller independent restaurants will see business rates bills cut in half on 1st April 2020, and Altus Group predicts that these outlets will save an average of £10,624 in tax during 2020/21.