Number of UK bars falling into administration doubles

By Luke Nicholls

- Last updated on GMT

Related tags: Public house, Insolvency

Nightclub operator Luminar went into administration late last month
Nightclub operator Luminar went into administration late last month
The number of UK bars appointing administrators has more than doubled between quarters two and three, reflecting the deep-set, challenging trading conditions.

According to the latest official insolvency statistics, the overall number of businesses going into administration in the hotel and licenced trade has increased by 33 per cent, with a year-on-year increase of 26 per cent.

“The latest insolvency statistics for the hotel and licensed sectors support our previous predictions,” said Peter Cooper, partner at Baker Tilly Restructuring and Recover. “Challenging trading conditions have translated into a significant number of bar, nightclub, restaurant and hotel insolvencies in quarter three, with wet led pubs and bars being particularly badly hit.

“As expected, there is some regional variation with the London markets holding up better than the provinces.”

Perfect storm

On Wednesday, BigHospitality reported that administrators at Ernst & Young, appointed to take over the running of nightclub operator Luminar, decided to close 11 loss-making sites, leading to the loss of 300 jobs​.

With a busy festive period approaching, Cooper believes that even more businesses may struggle to cope with the perfect storm of a weak economy and low consumer confidence over the coming months.

“As Christmas approaches and the prospects for a full scale economic recovery become less certain, the key issues for the sector will continue to centre around consumer confidence and spending power, restricted working capital availability and, as a consequence, the threat that businesses will not be able to absorb the impact of unforeseen events such as adverse weather.

“This may well lead to a greater number of insolvencies in Q4 2011 and Q1 2012.”

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