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1,406 UK restaurants go under in just 12 months

Published:  25 July, 2022

UK restaurant insolvencies have jumped 64% from 856 in 2020/21 to 1,406 in the past year as rising inflation and labour shortages drive restaurants out of business.

According to data from UHY Hacker Young, the national accountancy firm claims restaurants face significant threats from spiralling inflation, decreased consumer spending and a labour shortage.

The past quarter represents the largest number of restaurant insolvencies since monthly reporting began during the pandemic. 431 insolvencies of restaurants were registered in the three months to May 31, 2022 - a 29% increase on the previous quarter.

Insolvencies in the restaurant sector alone are even higher, with a 56% increase in company insolvencies in the year, rising from 1,407 to 2,193.

Previous research by UHY Hacker Young found that restaurants have already seen their losses rise to more than £800 million in the past six months as they felt the effects of major restructuring programs following the pandemic.

Peter Kubik, a partner at UHY Hacker Young, said: “Pressure is rising on the restaurant sector daily. More and more of them are shutting their doors as a result.

“Restaurants that only managed to survive the pandemic thanks to government support are now facing fresh challenges in the form of rising inflation, a post-Brexit labour shortage and consumers who simply cannot afford to spend as much.

“Smaller restaurants suffer the most from a shortage of EU staff post-Brexit. As a result, many find that they simply cannot hire enough staff to serve the number of covers they need to stay profitable. That’s one of the reasons for the raft of closures we’re seeing.”