London: The number of UK restaurants going bankrupt has risen by more than 60% in the past year due to labor shortages and the cost of living crisis, which has forced customers to reduce their expenses, according to the media.
New data from accountancy firm UHY Hacker Young showed that 1,406 restaurants in the UK closed in the 12 months to May, up 64% from a year earlier, The Guardian reported.
In proportional terms, this is an even larger increase in closures than for the wider hospitality industry, which has seen a 56% increase in insolvencies over the same period.
He joins a number of high-profile restaurant businesses, including Byron, Gourmet Burger Kitchen and Italian chains Strada and Carluccio’s, forced to close dozens of locations at the height of the pandemic as they suffered heavy financial losses during repeat lockdowns and other Covid restrictions.
“The pressure is mounting on the restaurant industry every day. More and more of them are closing their doors as a result,” said Peter Kubik, partner at UHY Hacker Young, The Guardian reported.
“Restaurants that have barely managed to survive the pandemic, thanks to government support, now face new challenges in the form of rising inflation, post-Brexit labor shortages and consumers who simply cannot afford to spend so much.”
Research published in June by UHY found that the losses of the top 100 restaurant groups had reached more than £800million in the previous six months after being forced to undergo major restructuring programs during the pandemic, when they were forced to subsist on state support. packages that included vacation at business rates and leave payments for staff.
Businesses across the UK have since faced a slowdown in consumer spending as prices for everything from gas and electricity to food and clothing soar, The Guardian reported.