The number of UK restaurants facing insolvency leapt by almost 60% over the past year, according to international audit, tax and advisory firm Mazars.
In 2021/22, 1,567 restaurants fell into insolvency – a rise of 984 on the previous year – while the last three months saw a 15% increase to 453, up from 395 on the quarter before, the tax firm reported.
Restaurants were dealing with high inflation, a sharp slowdown in consumer spending, increased food and energy bills, and labour shortages - particularly for skilled roles such as chefs – which contributed to increased staff costs.
This had resulted in insolvencies happening at a “far faster rate than during Covid”, Rebecca Dacre, a partner at Mazars, said.
“It is a very toxic mix of rising input costs, sharply rising finance costs and weak demand,” Dacre added. “Most restauranteurs have not seen this combination of negative factors before.
“The Christmas trading period is usually a bumper period for hospitality businesses. However, restaurants will be bracing themselves for a very tough winter, and many face a real battle to keep afloat.”
“There’s a certainty of further insolvencies if they don’t receive much more support from the Government, but the chances of the Government fully turning on the taps is low.”
