To date, 2018 is showing even worse numbers for restaurant insolvencies than the overall total for the previous year.
According to accountancy firm Price Bailey, 1,123 restaurant companies have become insolvent in 2018. These figures are in line with recent trends, as insolvency rates have risen by 35% yearly since 2010.
In conjunction with high levels of political uncertainty and an increase in wine duty, the past months have seen a large number of premises closing their doors. Villandry and Texture are among some of the most popular names, but chains such as Gaucho spin-off Cau, Cote, Strada, Prezzo, Jamie Oliver and Carluccio’s have also faced difficulties due to adverse market conditions.
Paul Pittman, partner at Price Bailey, claimed that market oversaturation should be counted as one of the main causes for this adversity, with many restaurants competing for a decreasing number of loyal customers. Rapid changes in consumer habits and tastes, heavily influenced by the widespread use of social media, increasing costs and decreasing consumer confidence due to Brexit are additional factors deemed responsible.
Chancellor Philip Hammond has recently announced a business rates cuts, which he claims could help 90% of on and off-trade establishments save up to £8,000 a year. The business rates cut will be reevaluated in 2021.