Restaurant insolvencies rise by 60% over the past year
In the last three months alone, the number of restaurant companies becoming insolvent rose by 15% to 453, up from 395 the previous quarter
Restaurant company insolvencies have increased by 59% over the past year, rising from 984 in 2020/21 to 1,567 in 2021/22, according to Mazars.
In the last three months alone, the number of restaurant companies becoming insolvent rose by 15% to 453, up from 395 the previous quarter.
It comes as restaurants across the UK have been dealing with the highest level of inflation since 1981 as well as a “sharp slowdown” in consumer spending.
As well as increasing food and energy costs, restaurants have also been hit by labour shortages, particularly for skilled roles such as chefs, which has in turn pushed up staff costs.
Rebecca Dacre, partner at Mazars, said: “Insolvencies of restaurant businesses are now happening at a far faster rate than during Covid. 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 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.”
