Off the menu…restaurant closures increase up 60 percent
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In the last three months alone, the number of restaurant companies going to the wall rose by 15 percent to 453, up from 395 in the previous quarter. The concerning analysis by business advisory specialists Mazars was based on data from the Insolvency Service.
Restaurants have been dealing with the highest inflation since 1981 and a sharp fall in consumer spending.
On top of rising food and energy costs, they have had to deal with shortages of labour, particularly for skilled roles such as chefs, which has pushed up staffing costs.
Some restaurants have already reduced their opening hours to keep power bills down.
Rebecca Dacre, a partner at Mazars, said: “Insolvencies of restaurant businesses are now happening at a far faster rate than during Covid.
Survival “It is a very toxic mix of rising input costs, sharply rising finance costs and weak demand. Most restaurateurs have not seen this combination of negative factors before.”
The run-up to Christmas is normally a bumper period but Ms Dacre added: “Many face a real battle to keep afloat.”
Kate Nicholls, boss of trade body UK Hospitality, said: “Survival this winter is the priority for venues across the country and there is the very real possibility that a significant proportion of our sector will not survive the winter.”
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