Restaurant industry in distress
14 Mar 2018
The hospitality industry continues to suffer, as reduced footfall and increasing business rates put pressure on the sector.
The latest figures from Springboard, provider of retail performance benchmarking insights, show that footfall fell by 0.5 per cent across the UK last month. This, coupled with soaring business rates, is threatening restaurant business across the country.
In a letter issued to Philip Hammond and signed by Chief Executives of companies including Merlin, Café Rouge owner Casual Dining Group, Bill's, and Young's Pubs, industry leaders urged the Chancellor to reduce "the unnecessary costs of doing business" in order to avoid further closures and job losses, saying that the sector is at "tipping point".
With Prezzo, Jamie's Italian, Byron and Strada all already having had to close some sites, the letter is issued as Carluccio's announces it has appointed advisers, Prezzo launches a company voluntary arrangement, and EAT also looks to be considering closing stores, among other options.
Chief Executive of Casual Dining Group, Steve Richards, adds: “The restaurant sector remains vibrant, innovative and dynamic and it has invested heavily in people, growth and communities over recent years, but it is now facing a perfect storm of soaring business rates, rising labour costs, Brexit-fuelled food inflation and softening consumer demand."
Kate Nicholls, Chief Executive of trade body UKHospitality, says that "restaurants are reeling from a series of body blows which have combined to bring what was a dynamic, innovative sector to its knees."
"Without fundamental reform of the rates system we are likely to see more casualties and a brake on investment in communities, business growth and people.”
At Beavis Morgan, we have extensive experience of working with clients in the hospitality sector and our professionals are acknowledged experts in issues affecting pubs, bars and restaurants.
Through our partner businesses, BM Structured Finance and BM Advisory, we are able to help with sourcing and restructuring debt finance for SME businesses, as well as assisting with resolving issues which can impact on business performance and success, and finding innovative solutions for businesses and individuals in distress.