Restaurants

Restaurant closures up 25% over the past 12 months

The number of restaurant insolvencies has jumped 25% in the last year up to 1,410 in 2018/19, compared with 1,130 for the previous year.

The study compiled by accounting firm UHY Hacker Young found that the rapid growth of the causal-dining sector since the last recession had resulted in an “over-saturated” mid-market which is still going through a dramatic shake-out.

Issues relating to Brexit, and the rise of costs following the drop in the value of sterling, has been cited as one of the reasons behind the rise in insolvencies.

The study also found that the UK’s Top 100 restaurants made a £82m loss in the last year, down from a pre-tax profit of £102m twelve months ago.

Peter Kubik, partner at UHY Hacker Young, said: “The crisis in the restaurant sector has been presented as a problem only for the chains that had lost touch with their customers. That’s overlooking the hundreds of small independent restaurants that have become insolvent.

“Good restaurants and bad have all struggled from over-capacity, weak consumer spending and surging costs. Having a loyal following is great but if that loyal following stops going out then you have a problem.”

The last year has seen the closure of Jamie Oliver’s restaurant group, and CVA agreements and a number of branch closures at Byron Burger and Strada.

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