The figures, from accountancy group UHY Hacker Young, show that the restaurant sector has been one of the hardest hit by the pandemic, with lockdown and social distancing rules impacting heavily on trade.
Despite Government support, restaurant chains such as Prezzo, Byron Burgers and Carluccio’s went into insolvency during the pandemic with other large chains, such as Frankie & Benny’s and Pizza Hut, forced to close sites and use CVAs to cut costs and keep businesses afloat.
While many restaurant businesses were able to keep afloat by CBILS or BBLS lending, they are now having to begin repayment of those loans, putting pressure on their cashflow, says UHY Hacker Young.
The Christmas period was a disappointing one for the sector due to spread of the Omicron variant with a fall in customer numbers and forced closures because of a lack of staff.
“The end of lockdown has not resulted in a painless rebound in fortunes for the sector. Many restaurants are struggling to pass on increased food and wage costs to customers which is putting margins back under pressure,” says Peter Kubik, partner at UHY Hacker Young
“Omicron is just the latest set-back for an industry hit hard in the last two years.”
The accountancy firm says that businesses are also facing the threat of decreased consumer spending due to April’s increase in National Insurance.
Although more restaurants are expected to become insolvent, UK Hacker Young predicts that these insolvencies could lead to a ‘helpful recalibration’ of rents for the hospitality sector. With the end of the moratorium on evictions of commercial tenants likely to create even more unoccupied space on high streets, falling rents could entice new entrants into the sector, it says.
The top 100 Restaurant companies are ranked by revenue, based on an analysis of company accounts filed as of September 30 2021, compared with accounts filed as of September 30 2020