More than one in 10 restaurants are at “imminent” risk of closure as financial hardship continues to blight Britain, according to recent data.
Roughly a fifth of all 50,900 UK restaurants surveyed by the accountancy firm Price Bailey had negative net assets on their balance sheets, while of the 10,000-plus already deemed “technically insolvent” more than half were placed in the “maximum risk” category by financial assessors.
Price Bailey, a major accountancy firm based in Oxford, said it expected to see an uptick of winding up petitions — a notice from a creditor telling a company to dissolve due to unpaid debts — as an increasing number of businesses find themselves in difficult positions.
Restaurant closures, the report said, are already running at their highest level in more than a decade. A total of 1,409 shut their doors in the year ending September 2024, up from 1,180 in the 12 months before.
In London, high profile closures have been happening apace. Most recently, Leroy in Shoreditch ceased trading after almost seven years, with the owners Ed Thaw and Jack Lewens writing emotionally on social media about the situation.
“It has been quite the ride but sadly nothing lasts forever,” they said.
“We fought hard against the dying of the light but sometimes there is a time to let go. In that time we’ve experienced some incredible highs and lows. It has been, joyfully and painful. Everything that makes life worth living. We could not have done it without brilliant staff and suppliers and customers.
“Our heart breaks not to be able to continue the journey but we can leave knowing that we did all we could. Despite what our government may think this is a noble profession and indeed any small business owner has our enduring respect.”
Elsewhere, other popular venues including Pidgin in Hackney, Snackbar in Dalston, and Sydenham’s fabulous Mystic Burek have all called time in recent weeks.
Matt Howard, the head of the insolvency and recovery team at Price Bailey, said: “Unlike most other sectors of the economy, insolvencies in the hospitality sector are still rising. There has been a sharp rise in restaurants entering insolvency over the last six months and the sector’s woes look set to continue.
“More than one in 10 restaurants are technically insolvent with maximum credit risk scores, which means that roughly half of them will close in the next 12 months. These businesses will find it almost impossible to access extra funding unless the owners provide personal guarantees, which few are likely to do in the current climate.”
It comes after warnings from hospitality businesses that last month’s Budget will “make things worse” for the industry.
UK Hospitality CEO Kate Nicholls said: “This Budget is the latest blow for hospitality businesses. Rising taxes, increasing costs and fragile consumer confidence risk bringing growth to a grinding halt.”
