More than a third of the top 100 restaurant chains in the United Kingdom made a loss in the last 12 months, a number which has further increased from the year before. UHY Hacker Young, the accountancy firm which compiled the report, cited rising labour costs, business rates and an oversaturation of the market as the key factors behind the decline.
No-one is immune – Jamie Oliver recently closed 12 of his Jamie’s Italian restaurants, and Byron, a burger chain, is planning to close almost a third of its 67 branches.
“Pressures on the restaurant sector have been building for years, and the last year has pushed a number of major groups to breaking point,” said Peter Kubik of UHY. “With Brexit hanging over consumers like a dark cloud, restaurants can’t expect a bailout from a surge in discretionary spending.”
“Consumers only have a finite amount of spending power when it comes to eating out … oversaturation of the marker means that groups that fall foul of changing trends can easily fail.”
Rising food costs affected by the weakening of the pound was also a factor.