Published on : Monday, October 30, 2017
As per accountancy firm Moore Stephens, about 20 per cent of restaurants, or 14,800 outlets, are threatened with closure. The study found out that the number of restaurants declaring insolvency has increased by 13% in the year ending March 2017.
A fall in the value of the pound since Britain’s vote to leave the EU last year has hit the restaurant sector hard, with the rising cost of imports squeezing restaurants’ profit margins.
After the government’s decision to increase the National Living Wage to £7.50 for workers aged 25 and over in April added pressure on the restaurant business fighting to turn a profit.
Jeremy Willmont, head of restructuring and insolvency at Moore Stephens said that the increase in the number of insolvencies in the last year is indicative of how difficult the market conditions are now. Financial ups and downs are common in the restaurant sector however what is happening now much not the usual norm.
He added, a restaurant’s fortune can change remarkably quickly as consumers look for the next new and exciting opening.