Why have UK restaurant closures increased by a fifth in a year?

Tanwen Dawn-Hiscox

Tanwen Dawn-Hiscox

Deputy Editor

UK consumers are eating out less, they're spending less, and restaurants are suffering as a result. 

According to research published by accountancy firm UHY Hacker Young, 1,412 restaurants fell into insolvency in the year ending in June 2019, a 25 percent rise on the previous year.

And it's not just the mid-market that was hit: the UK's top 100 restaurants suffered a loss of £82 million in the same time frame, compared with a pre-tax profit of £102 million the year before. 

Reduced consumer spending, coupled with rising food costs related to Brexit uncertainties and the crash of the sterling are thought to be the major causes, though a plummet following the rapid expansion of the mid-market dining sector after the 2008 financial crisis continues to claim victims too. 

While chains like Byron, Gourmet Burger Kitchen and Jamie's Italian have borne the brunt of the closures, many independent restaurants have been affected too. 

Peter Kubik, a UHY Hacker Young Partner said  that "good restaurants and bad have all struggled from overcapacity, weak consumer spending and surging costs. Having a loyal following is great but if that loyal following stops going out then you have a problem. The number of restaurants whose sales are at or near capacity is pretty small – they’re the exception."

"Aggressive management of cashflow" as well as customer loyalty and a differentiated offering will be the saving grace of the restaurants that endure the crunch. 

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Tanwen Dawn-Hiscox

Tanwen Dawn-Hiscox

Deputy Editor 16th September 2019

Why have UK restaurant closures increased by a fifth in a year?