Wed, 09 Nov 2022 | BUSINESS NEWS
Factors including rising costs pushed insolvencies in the restaurant industry up 46 per cent in the third quarter of the year, according to the latest Insolvency Service figures. In the three months to September 2022, there were 158 restaurant insolvencies, up for 108 in the three months to June 2022.
The increase in restaurant insolvencies comes amid growing concerns over the headwinds facing the wider UK hospitality industry, which is being hit by problems including rising energy costs, inflation, weakened consumer spending and growing debt piles.
Interest rates recently hit a 14-year high, while hospitality businesses are faced with the need to repay loans taken on during the COVID-19 pandemic, as well as the removal of protections limiting creditor action to retrieve debts.
The Insolvency Service figures come alongside a recent survey highlighting the fears within the hospitality industry. The joint report from UK Hospitality, the British Beer and Pub Association (BBPA), the British Institute of Innkeeping (BII) and Hospitality Ulster found that over a third of hospitality businesses (35 per cent) expected to be making losses or unable to continue trading by the end of 2022.
77 per cent reported decreasing customer numbers, while 85 per cent said that they expected the situation to worsen in the coming months. 96 per cent were experiencing higher energy costs and 93 per cent were seeing food price inflation.
The trade bodies behind the survey said that hospitality firms were facing a “stark situation” and that many were “on the brink due to the cost of doing business crisis”.
They added: “The vulnerability of the sector due to soaring energy costs, crippling rises in the cost of goods and dampening consumer confidence is on full display in this survey and, if urgent action isn’t taken, it is looking incredibly likely that we will lose a significant chunk of Britain’s iconic hospitality sector in the coming weeks and months.”
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