An average of five restaurants closed each day in the first three months of this year, new figures show, with 569 businesses filing for insolvency in the first quarter of 2023.
The first three months of this year witnessed the highest rate of British restaurant closures in a decade, according to new figures from accountancy firm Price Bailey.
An average of 5.6 restaurants filed for insolvency per day during the first quarter of 2023, totalling 569 businesses. This brings the total over the last 12 months to 2,028, a 55% increase on 2021 figures, which saw 1,303 restaurants, an average of 3.1 per day, forced to close.
Climbing energy costs, up as much as 80% year-on-year, as well as a 22% hike in food price inflation and rising interest rates are all putting pressure on hospitality businesses, UKHospitality told This is Money.
However, despite the rise in restaurant closures, separate data from the Office for National Statistics commissioned by Price Bailey reveals a rise in optimism among business owners.
One in three British restaurants report that turnover is rising. This marks a significant improvement on six months ago, when 16% of businesses reported rising turnover compared to 37% who said it was on the decline.
Matt Howard, head of the insolvency and recovery team at Price Bailey, said: ‘The improving economic outlook may come too late for many restaurant businesses which have accumulated unmanageable levels of debt over a testing few years.
‘There is often a lag between a return to more robust economic activity and declining insolvencies. Banks will likely start to put increasing pressure on debtors to perform or pay off loans.
This article was originally published by the drinks business and has been shared with permission.
