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60% jump in restaurant insolvencies in the UK last year

Worker shortages and cost of living crises force 1,406 restaurants to down shutters

Restaurant insolvencies have risen by 60% in the past year due to labour shortages and rising costs.

A new report from UHY Hacker Young showed that 1,406 UK restaurants closed their doors in the 12 months to May, up 64% from last year.

That compares to the wider hospitality sector, which saw a 56% increase in insolvencies over the same period.

At the height of the pandemic, several high-profile restaurants - including Byron, Gourmet Burger Kitchen, Strada and Carluccio's - experienced heavy financial losses after repeated lockdowns and Covid restrictions forced them to close dozens of sites.

"Pressure is rising on the restaurant sector every day. More and more of them are shutting their doors as a result," said Peter Kubik, a partner at UHY Hacker Young.

"Restaurants that only just managed to survive the pandemic thanks to government support are now facing fresh challenges in the form of rising inflation, a post-Brexit labour shortage and consumers who simply cannot afford to spend as much."

According to a June study by UHY, restaurant losses had risen to more than £800mln after undergoing major restructuring programmes during the pandemic, when they were forced to rely on state support packages including business rates holidays and furlough payments.

In June, inflation hit a record high of 9.4%, further straining households and forcing them to cut costs, including eating out.

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