Pubs, Restaurants And Clubs Insolvencies Increase By 86% In Q3 2019

Licenced restaurants hardest hit with 14 falling into administration during the quarter

The number of companies in the Pubs, Restaurants and Clubs sector that fell into administration during the third quarter of 2019 has almost doubled, going from 14 in Q2 to 26 in Q3 according to new analysis from KPMG.

A study of notices in the London Gazette indicates a difficult period for UK organisations across the board, with a total of 417 companies falling into administration between July and September 2019, an increase of over a third from the previous quarter.

Within the Pubs, Restaurants and Clubs sector, high profile cases include the pre-pack administration of Cabana Restaurants, Spud-U-Like and All Star Leisure. Licenced restaurants were hardest hit, accounting for 14 out of the 26 insolvencies; however, pubs fared better over the last quarter with four companies going into administration.

Paul Berkovi, Director in Restructuring, said: “It is no surprise that in today’s economic climate, customers are being more cautious about how they spend the pounds in their pocket. On top of dwindling consumer confidence, the hospitality industry also has to contend with rising overheads, fluctuations in exchange rates and increasing employments costs. Combine this with general political uncertainty making future planning extremely difficult and it is a perfect storm which is hitting the sector hard.”

Global Head of Leisure and Hospitality, Will Hawkley said: “Those that are weathering this storm are taking the time to really understand what their customers want from them, and are working to deliver this in new and innovative ways.  If customers are going to be tempted to part with their hard-earned cash then experience is key. Having robust systems in place such as agile end to end supply chain management and tech enabled processes to help capture and measure customer preferences, and enhance the customer experience, will help companies flex for the future.”