Losses at major UK restaurant groups up 24pc in six months

Losses at the top 100 UK restaurant groups grew 24% from £673m to £832m in the past six months, according to figures from accountancy group, UHY Hacker Young.

The scale of the losses has been driven by the effects of major restructuring programmes they have undertaken following the pandemic. Some restaurants that were forced to close during the pandemic saw their debts – primarily to landlords – build up to unsustainable levels.

Since the sector reopened, restaurants have also faced spiralling input costs and supply chain issues.

UHY Hacker Young says the sector was already in difficulty long before the pandemic. Many chains had expanded very aggressively, taking on large amounts of debt that they were struggling to service even before Covid.

Peter Kubik, Partner at UHY Hacker Young says: “Losses among the UK’s major restaurant chains have reached enormous proportions. Many of them overextended themselves significantly over recent years, just in time to be hit by Covid and inflation running out of control.”

“With economic dark clouds still gathering and the UK facing a cost of living crisis, there are still strong headwinds facing the casual dining sector. Restaurants are likely to be under a lot of pressure for some time yet.”

Kubik feels that the worst is over, however, with some positive signs emerging.

“While some restaurants have disappeared from high streets altogether, many have managed to save themselves with far-reaching restructuring programmes," he explains. "While the sector is not out of the woods, the groups that have dropped underperforming branches and shed debt through CVAs are in a better state to compete.”

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