Casual dining sector hit with 1,123 businesses filing for insolvency in the first three-quarters of 2018.
Analysis from a top 30 accountancy firm show insolvency rates within the restaurant sector have risen by 35% year on year.
Despite being only three quarters through the year, 2018 has already had more cases of insolvency in the sector than the entirety of 2017.
The factors that are contributing to the increase in businesses failing include a change in customer spending, restaurants facing higher costs as well as increased competition offering the consumer an ever-wider choice of dining options.
If the household budget of customers is limited, there is less disposable income to spend on nights out, or even treating the family to a meal out for that particular ‘special’ occasion. More and more consumers are choosing take-aways and having food delivered to their homes.
Businesses have faced rising costs with the implementation of the National Living Wage, increased rents and business rates.
Due to a cocktail of increased competition, rising costs and a declining appetite to eat out, the margins have become ever more squeezed and in recent months have led to high street casualties and the well publicised re-organisations of Jamie’s Italian, Prezzo, Carluccio’s etc
Since 2015, the rate of businesses falling into a form of insolvency has consistently risen and is expected to exceed 1,500 for the first time by the end of this year, even though it was announced by the Chancellor in the recent budget, that business rates would be cut with a view to making a significant saving for 90% of independent pubs, restaurants and cafes.
If businesses fail to keep evolving and attracting sufficient customers through the door and offer the consumer value for money, then their doors will close and then they will be added to the next round of insolvency.
Should you need to discuss your individual financial concerns, please call Gareth Price on 0207 186 1173.
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