August insolvency risk drop shows restaurant sector recovery

By Melodie Michel contact

- Last updated on GMT

The number of restaurants at higher than normal risk of insolvency is lower in the North East than in the rest of the UK
The number of restaurants at higher than normal risk of insolvency is lower in the North East than in the rest of the UK

Related tags: North east

The number of restaurants at risk of insolvency has dropped nationwide, according to research by insolvency trade body R3.

R3 North East’s latest assessment, which compiles company information to track the number of businesses in that have a heightened risk of entering insolvency in the next year, found that 30 per cent of UK restaurants had a higher than normal risk of insolvency in August, compared to over 38 per cent in March.

North East on top

Fewer restaurants are at risk of insolvency in the North East (26 per cent) of than in the rest of the country, with 32 per cent in the East of England and 31 per cent for both London and Scotland.

Allan Kelly, chair of R3 in the North East and a restructuring partner in Baker Tilly North East, said: “While there might be a degree of seasonality in these latest figures, there's certainly encouragement to be had around the North East hospitality sector that both R3's report and others are all pointing to.

"The sudden impact of the credit crunch and recession on everyone's disposable income hit industries that rely on discretionary spend disproportionately hard, and even though the North East has a huge amount to offer in terms of excellent restaurants and hotels, it's taken a long time to regain the ground that was lost.

"The wider regional economy still seems very much to be a mixed bag, but the overall feeling across the North East remains optimistic and there's every expectation that the general improvement in the economic atmosphere that we've felt over the last 12 months will be sustainable over the longer term.”


Back in April, R3 had identified Yorkshire as the best performing region for restaurants​, with 35 per cent of them at higher than normal risk of insolvency. At the time, the North East figure stood at over 37 per cent, and the worst-performing region was the West Midlands at 43 per cent.

Related topics: Business, Restaurants, Trends & Reports

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