UK’s top restaurants swing to £93m loss
The UK’s top 100 restaurants swung to a loss this year as they struggled to stay afloat under the increasing pressure of rising overheads and falling sales, which are taking their toll on the casual dining sector.
The industry has plunged to a £93m loss in the last 12 months, in a year that has seen the collapse of casual dining veteran Jamie’s Italian, while Frankie & Benny’s, Chiquito, Giraffe and Ed’s Easy Diner faced branch closures.
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Last year the top 100 restaurants in the UK reported profit of £37m, according to research by accountancy firm UHY Hacker Young, which has analysed data from company’s latest publicly available financial accounts.
However, a slump in consumer spending – the average household now spends £967.20 per year on dining out compared to £988 last year- and mounting costs such as wages, rents and raw materials are weighing on restaurants’ profitability.
In London, Flat Iron was forced to close its Notting Hill restaurant in July after a hike in rent prices, while Hawksmoor shuttered the two remaining branches of its sister restaurant Foxlow in June.
The increasing popularity of home delivery services such as Deliveroo and Uber Eats has created an additional sales channel but in some cases has also reduced more profitable in-person visits.
Consumers choosing to order in rather than dine out has seen restaurant alcohol sales fall, affecting what is often a restaurant’s highest-margin product.
UHY Hacker Young partner Peter Kubik said: “Many restaurant groups are finding it difficult to raise capital from their shareholders – they are finding their patience for putting in more money has run out.
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“There are now few restaurant chains that aren’t either considering a strategic restructuring or a reduction of their branch networks.
“Restaurants are also taking action at a micro level such as simplifying their menus to reduce waste, cut costs and focus on their most popular dishes.”