64% Jump in Restaurant Insolvencies Report Reveals

The number of restaurant insolvencies has risen dramatically over the past year amid staff shortages and rising inflation, according to a new study.

Accountancy firm UHY Hacker said the total number of insolvencies rosefrom 856 in 2020/21 to 1,406 in the past year.

Peter Kubik, of UHY Hacker Young, said restaurants are facing escalating inflation, diminished consumer spending and staffing shortages.

Mr Kubik said:
“Pressure is rising on the restaurant sector every day. More and more of them are shutting their doors as a result. Restaurants that only just managed to survive the pandemic thanks to government support are now facing fresh challenges in the form of rising inflation, a post-Brexit labour shortage and consumers who simply cannot afford to spend as much.

“Smaller restaurants are suffering the most from a shortage of EU staff post-Brexit. Many are finding that they simply cannot hire enough staff to serve the number of covers they need to stay profitable.

“That’s one of the reasons for the raft of closures we’re seeing.”

This report follows an earlier warning in March this year when UKHY Hacker warned that the restaurant sector has emerged from one crisis only to face an onslaught of other challenges.”

Speaking of March Peter Kubik said:
“Covid restrictions may have ended but higher loan repayments, National Insurance increases and potentially lower demand as the cost of living crisis starts to bite could see an even greater number insolvencies within the sector.” I note that the board,
“Restaurants could at least rely on Government support during the worst of the pandemic. Now that these protections have come to an end, they’re having to face multiple challenges with zero help.