Restaurant closures increase by 64% as customers cut spending

A shortage of workers and surging inflation are pushing more restaurants into insolvency with the number jumping by more than 60% in the past year according to new data from UHY Hacker Young.

The data analysis shows that 1,406 restaurants in the UK closed their doors in the 12 months to May, up 64% (856) on the previous year.

Previous research by UHY Hacker Young found restaurants have already seen losses rise to more than £800 million in the past six months as they felt the effects of major restructuring programmes after the pandemic.

Peter Kubik, of UHY Hacker Young, said restaurants are facing spiralling inflation, decreased consumer spending and a labour shortage.

“Pressure is rising on the restaurant sector every day. More and more of them are shutting their doors as a result.”

“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.”

“Smaller restaurants are suffering the most from a shortage of EU staff post-Brexit.”

“Many are finding that they simply cannot hire enough staff to serve the number of covers they need to stay profitable.”

“That’s one of the reasons for the raft of closures we’re seeing.”