Growing rate of UK restaurant bankruptcies

Owing to a “toxic mix” of surging energy costs, staff shortages and falling bookings, closures in the sector rose by 60% – with 1,567 insolvencies during 2021-21, up from the 984 seen during 2020-21. This figure includes 453 over the past three months – up from 395 in the previous quarter.  

Mazars partner Rebecca Dacre said: “Insolvencies of restaurant businesses are now happening at a far faster rate than during Covid.  

“It is a very toxic mix of rising input costs, sharply rising finance costs and weak demand. Most restaurateurs have not seen this combination of negative factors before.”  

The research follows warnings from industry lobby groups – including UK Hospitality and the British and Pub Association – last month that more than a third of hospitality businesses could go bust by early 2023. 

Mazars also said the combined pressures of consumers’ plans to cut down on essential spending and firms struggling to recruit enough employees will, despite the typically lucrative holiday period, likely spell a tough few months for the industry.  

Dacre explained: “The Christmas trading period is usually a bumper period for hospitality businesses. However restaurants will be bracing themselves for a very tough winter and many face a real battle to keep afloat.  

“There’s a certainty of further insolvencies if they don’t receive much more support from the government, but the chances of the government fully turning on the taps is low.”

Businesses on the brink will be a hot topic of conversation at this year’s TRI Conference, headline supported by Manolete, taking place on 8 December. If you’re interested in attending, speaking at or sponsoring this event, please reach out to a member of our sales team at sales@shardfinancialmedia.com.