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Monday, February 17, 2020

UK restaurant closures surge as consumers lose appetite to spend

"In the wake of Brexit uncertainty and interest rate rises, it seems consumers are tightening their belts and discretionary spending is the first thing to go," Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, said in a statement.

By: Reuters | London | Published: December 17, 2018 7:21:49 am
Support in UK for more tax and spending at 15-year high: Survey British consumer spending grew last month at its slowest pace in more than a year.

More than 1,000 restaurants went bust in Britain in the year through September, a 24 percent rise on the previous 12 months as the industry grapples with overcapacity as consumer spending slows, accountants Moore Stephens said on Monday. Restaurant chains such as Carluccio’s, Prezzo, Jamie’s Italian and Strada have closed outlets in the last year, and there are few signs of any pick-up in demand.

“Closures in the restaurant sector are at epidemic levels now,” Jeremy Willmont, head of restructuring and insolvency at Moore Stephens, said in a statement.

“The impact is visible on almost every high street of a major town or city.”

Moore Stephens said that 1,219 restaurants closed across the country between September 2017 and September 2018, up from 985 a year earlier.

“In the wake of Brexit uncertainty and interest rate rises, it seems consumers are tightening their belts and discretionary spending is the first thing to go,” Willmont said.

British consumer spending grew last month at its slowest pace in more than a year and retailers have already sounded warnings about the Christmas period, including Sports Direct owner Mike Ashley, who said on Thursday that trading in November was “unbelievably bad”.

Restaurants also faced pressure from rising wages and higher food and beverage prices due to a weak pound, Moore Stephens said.

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