The number of restaurants closing across Britain hit a new quarterly high at the end of 2023, with more than 500 closing.
There were 514 restaurants closing permanently across England, Scotland and Wales in the final quarter of last year, compared to 481 in Q2 2023, according to data obtained under the Freedom of Information Act by accountancy firm Price Bailey.
The research showed that 1,932 restaurants entered insolvency in 2023, equating to an average of more than five closures per day, up from 3.6 closures per day in 2022.
The number of restaurants closing was also up 45% from 2022, when there were 1,332 restaurant insolvencies.
Rising interest rates, high inflation, cash-strapped consumers, the end in government support for energy bills, the repaying of Covid support loans and strike action are all contributing factors to the insolvency figures during the period.
Restaurants closing hits highest quarterly total
Matt Howard, Head of the Insolvency and Recovery at Price Bailey said “Restaurant closing hit their highest ever quarterly total in Q4 smashing the record set just six months previously.
“Many hospitality businesses are on life support, and with the services sector leading the way into recession, business failures in the restaurant trade are likely to continue to rise throughout 2024.
“Many hospitality businesses are on life support, and with the services sector leading the way into recession, business failures in the restaurant trade are likely to continue to rise throughout 2024.
“The inflation rate for restaurants crept up again in January and hopes of an early rate cut appear to be receding. The first quarter is a much slower trading period for restaurants, which will make it very difficult for many to recover from a lacklustre festive season.
“These highly leveraged businesses were betting on interest rates staying low but with rates having sharply risen many are unable to make loan repayments. The longer rates stay at current levels, the more restaurant businesses are likely to succumb.
“As rates have risen banks are piling pressure on restaurants to make capital as well as interest repayments on loans. This has proved the final nail in the coffin for many restaurants.”
