Restaurant company insolvencies have increased by 59% over the past year, according to research.
The total has risen from 984 in 2020/21 to 1,567 in 2021/22, according to advisory firm Mazars.
In the past three months, the number of restaurant companies becoming insolvent rose to 453 from 395 the previous quarter, it added.
It is a very toxic mix of rising input costs, sharply rising finance costs and weak demand. Most restauranteurs have not seen this combination of negative factors before— Rebecca Dacre, partner at Mazars
As well as increasing food and energy costs, restaurants have been hit by shortages of staff, particularly for skilled roles such as chefs, said the report.
Some restaurants have revealed they will be cutting their trading hours to save on the cost of energy.
Rebecca Dacre, partner at Mazars, said: “Insolvencies of restaurant businesses are now happening at a far faster rate than during Covid.
“It is a very toxic mix of rising input costs, sharply rising finance costs and weak demand. Most restauranteurs have not seen this combination of negative factors before.
“The Christmas trading period is usually a bumper period for hospitality businesses. However, restaurants will be bracing themselves for a very tough winter and many face a real battle to keep afloat.
“There’s a certainty of further insolvencies if they don’t receive much more support from the Government, but the chances of the Government fully turning on the taps is low.”
