The Night Time Economy Adviser for Greater Manchester has warned of the impending collapse of the sector unless business support is provided in the government’s Autumn Budget.

The comments made by Sacha Lord come as the overall number of insolvencies for food and beverage services leapt to 236 in August from 157 in June and 216 in July, according to the latest Insolvency Service data analysed by RPG accountants found.

Nationally, the number of restaurant and mobile food outlets going into liquidation increased 46% in the quarter to September 2022, from 108 in June to 158 by the end of August, the findings showed.

The figures echo reports by UKHospitality, the British Beer and Pub Association (BBPA), the British Institute of Innkeeping (BII) and Hospitality Ulster that 35% of operators expect to be operating at a loss or be unviable by the end of the year, with 96% experiencing higher energy costs and 93% facing food price inflation.

“The data we have received today is just the tip of the iceberg and shows a very worrying trend which we believe will only get worse over the months to come,” Lord said.

“An increase of nearly 50% in insolvencies in three months shows the sector in an extremely worrying state, and it is now entering winter in freefall.

“There is a severe lack of confidence among operators, particularly those running small independent businesses, and this has been exacerbated by the confusion over possible business support and ongoing U-turns. The implementation and subsequent reversal in the freeze on alcohol duty is just one example where planning has been made impossible, adding to the despondency and anxiety across the board.”

Lord warned that hospitality businesses were paying more for ingredients, energy and day-to-day business needs than they were this time last year.

“We are seeing venues shutting due to financial difficulties on a daily basis. The sector urgently needs support through a reduction in VAT and through business rates relief, both measures that will undoubtedly offer operators a lifeline,” Lord added.

Gareth Hunt, licensed insolvency practitioner at RPG Chartered Accountants, said: “The main catalysts of these closures have been the increase in business costs and gas prices, interest rates rises, reduced footfall and unfortunately we are wholly expecting this trend to rise further, over the winter months in particular.”

The findings come as the latest Barclaycard data reveals that consumers are spending less on eating out at restaurants.