Final quarter of 2022 ‘worst on record’ for restaurant closures
Alongside this the sector has seen a shortage of labour, particularly in skilled positions like chefs, pushing up labour costs
The final quarter of 2022 was the “worst on record” for restaurant closures, as 504 restaurant companies entered insolvency in Q4 of 2022, according to new data from Mazars. This marked an 11% rise against the previous quarter.
Meanwhile, restaurant company insolvencies reached their highest level in four years in December 2022, as 188 restaurants entered insolvency over the month.
This number is 71% higher than the 110 companies that failed in December 2021 and the highest monthly number of insolvencies in the sector since at least January 2019.
This data comes as restaurants in the UK have dealt with the highest level of inflation since 1981 and a sharp slowdown in consumer spending, as well as strikes affecting pre-Christmas bookings.
Alongside this, the sector has seen a shortage of labour, particularly in skilled positions like chefs, pushing up labour costs.
Rebecca Dacre, partner at Mazars said: “Struggling restaurant companies often count on a strong Christmas period to keep their heads above water. Weaker than usual December trading will have persuaded many that they have no alternative but to shut down.
“With many households exiting fixed-rate mortgages and having to sign up to more expensive deals, consumer spending is likely to suffer. Unfortunately, this difficult period for restaurants is set to continue for a while longer.”