Restaurant group losses increase by eye-watering 174% in one year

10 January 2022 by
Restaurant group losses increase by eye-watering 174% in one year

Losses at the UK's 100 biggest restaurant groups increased by 174% in the year to September 2021 reaching £673m, according to data from accountancy group UHY Hacker Young.

The increase compares to losses of £246m in the year to September 2020.

Peter Kubik, partner at UHY Hacker Young, said: "The end of lockdown has not resulted in a painless rebound in fortunes for the sector. Many restaurants are struggling to pass on increased food and wage costs to customers which is putting margins back under pressure. Omicron is just the latest set-back for an industry hit hard in the last two years.

"They are also facing the threat of decreased consumer spending due to April's increase in National Insurance.

"The government has stepped in to help and provided a great deal of support for the sector but it's likely that even more will be needed, it's no surprise that the industry is fiercely lobbying for an extension of its lower VAT rate."

During the Covid-19 lockdowns it is estimated lost sales cost saw the hospitality industry miss out on £200m a day, with businesses still incurring costs including rent and utilities.

The pandemic drove several chains, including Prezzo, Byron and Carluccio's into insolvency, while others were forced to reduce their estate or pursue CVAs to ensure their survival.

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