Restaurateur David Moore has hit out at the UK government for “sitting on its hands” while dozens of businesses in the restaurant sector have collapsed or faced closure in the past year.
Commenting on the fate of London steakhouse chain Gaucho, which now looks to be heading into administration thanks to mounting debts and underperformance from its sister chain Cau, Moore pointed the blame squarely at Brexit for bringing down consumer spending.
“It’s like Armageddon on the high street while the government sits on its’ hands and does nothing about it,” he said in an emailed statement.
So many chains and small businesses in the UK are in financial distress and could easily face a similar fate to Gaucho if things don’t change quickly.”
Advisors at KPMG were brought in to assess whether to close or sell sister chain Cau’s 22 restaurants earlier this year.
But on Monday, Gaucho filed a notice of intention to appoint Deloitte as its administrator.
Jamie’s Italian, Carluccio’s and Byron Burgers have all been forced to close multiple sites and longstanding Soho haunt The Gay Hussar has also been closed down within a year.
Most recently 28°-50° Fetter Lane, the wine-focused restaurant founded by chef Agnar Sverrisson and Xavier Rousset, was sold to Cliffords Restaurant Limited.
A number of industry insiders have warned that the UK’s split from the EU will cause a “seismic shift” in the country’s on-trade landscape, and things will only get worse as the Brexit deadline (29 March 2019) approaches.
Around two restaurants per week have closed over the past year to March, according to CGA’s market report published last month, which predicts the number of sites across the UK will continue to fall throughout 2018.
CGA said that the closures are the result of a combination of Brexit’s weakening of the pound, and increased competition after a surge of private equity-backed restaurants have opened over the past decade.
“Brexit-driven costs have meant 11% food inflation at kitchen doors,” CGA analyst Peter Martin said at the time. “The cost pressures are not going away. Prices have gone up and are staying up.”
Staff shortages are also a cause for concern. A YouGov survey published in June found that around 330,000 staff currently working in the UK hospitality industry are considering leaving the UK due to Brexit.
Calling on the government to do more to support the industry, Peter Ducker, chief executive of the Institute of Hospitality, said: “Brexit will present some fundamental challenges to our sector if the changes proposed around immigration are approved, given the sheer number of staff and businesses that would be affected.”
But Moore, who founded his Micheiln-starred Charlotte Street restaurant in 1991, said that a drop in consumer spending — induced by the current economic climate in the UK — was also to blame.
Gaucho, he said, has “been in the red due to soaring cost of business rates and weaker consumer spending following Brexit.”
“To this effect, Pied á Terre is set to lobby the government to take immediate action to help stabilise business rates and help reduce VAT to ultimately help the future of the UK’s high street.”