Restaurants have been impacted by a fall in consumer spending and many of them will have hoped for a stronger run-up to Christmas without the impact of strikes, particularly in London and the South.
Energy bills are also taking their toll and a recent survey found that costs will have tripled for some hospitality businesses since beginning of last year. HMRC has also increased its pressure in collecting Covid tax arrears.
It is inevitable that we will see further closures in the coming months, but we mustn’t forget that we’re talking about one of the most resilient and versatile sectors of the economy - something which is highlighted by the fact that we’re still seeing new openings on a daily basis.
Restaurants can survive although they need they need to keep innovating. Hospitality, for example, is going through a huge transformation in terms of technology including switching to omnichannel digital ordering. Not only does this suit the changing need of the consumer it can reduce overheads for the restaurant while increasing reach at the same time.
How we can help
Kunal Gadhvi is a restructuring partner at Irwin Mitchell who specialises in advising businesses in the consumer sector.
For further information about our expertise in the hospitality sector, please contact our sector lead, Charlotte Rees-John.
London restaurateurs have described the outlook for the sector as ‘bleak’ after research has revealed that the number of hospitality businesses going bust has jumped by 65 per cent in the last year. The figures, which were released by accountancy firm Price Bailey, show that 1,880 British restaurant businesses became insolvent in 2022, compared to the previous 12 months when 1,139 restaurant businesses went into insolvency. According to the firm, an average 5.2 restaurant businesses are facing closure per day, up from 3.1 in 2021. Price Bailey said that many of these businesses “consist of multiple restaurants”.