A nightly economic advisory has warned this could rise further unless business support is delivered in the government’s autumn budget. According to figures released by the Insolvency Service – and analyzed by RPG Chartered accountants incorporating Crawfords – the number of restaurants and food outlets being placed into liquidation nationally rose by 46% in the quarter to September 2022, from 108 in June to 158 by the end of August. Sacha Lord, who is one of three night advisers across the UK, has warned that the data signals an impending collapse of the industry. He said: “The data we have received today is just the tip of the iceberg and shows a very worrying trend which we believe will get worse in the coming months. “A rise of almost 50% in insolvencies in three months shows the industry to be in an extremely worrying state and now entering the winter in freefall. “There is a serious lack of confidence among operators, particularly those running small independent businesses, and this has been exacerbated by confusion about potential business support and constant churn. “The implementation and subsequent reversal of the alcohol tax freeze is just one example where planning has become impossible, adding to the desperation and stress across the board.” “The plain truth is that hospitality businesses are paying more for ingredients, energy and day-to-day business needs than they were last year, and we’re seeing venues close every day due to financial difficulties. “The industry urgently needs support through a reduction in VAT and through business rate relief, both measures which will no doubt offer operators a lifeline.” Image: Sacha Lord. Photo: Darren Robinson Photography Separate research this week by UKHospitality, the British Beer and Pub Association (BBPA), the British Institute of Innkeeping (BII) and Hospitality Ulster found that 35% of operators are operating at a loss or expect to be unviable by the end of the year. About 96% face higher energy costs and 93% face food price inflation. Gareth Hunt, Licensed Insolvency Practitioner at RPG Chartered Accountants, added: “The main catalysts for these closures have been rising business costs and gas prices, interest rate rises, rate cuts and unfortunately we fully expect this trend to increase further, beyond especially the winter months”.
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