December was worst month for UK restaurant closures in four years
UK restaurant company insolvencies in December of last year were the highest in at least four years says Mazars, the international audit, tax and advisory firm.
188 restaurant companies became insolvent in December 2022, 71% more than the 110 companies that closed in December 2021 and the highest monthly number of insolvencies in the sector since at least January 2019, (when Mazars began collecting its data).
The data also shows that the last quarter of 2022 was the worst on record for restaurant closures.
As reported by Harpers, 504 restaurant companies entered insolvency in Q4 of 2022, an 11% rise compared to the previous quarter. However, the three previous quarters have all been the worst on record for UK restaurant company insolvencies, with 396, 453 and 504 insolvencies respectively.
The root cause seems pretty clear – restaurants across the UK have been dealing with the highest level of inflation since 1981 and a sharp decline in consumer spending, as well as strikes affecting pre-Christmas bookings.
Combine this with increasing food, energy and labour costs, many restaurants have had to reduce their trading hours to stay afloat.
Rebecca Dacre, Partner at Mazars said: “Struggling restaurant companies often count on a strong Christmas period to keep their heads above water. Weaker than usual December trading will have persuaded many that they have no alternative but to shut down.
“With many households exiting fixed-rate mortgages and having to sign up to more expensive deals, consumer spending is likely to suffer. Unfortunately, this difficult period for restaurants is set to continue for a while longer.”
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