Five restaurant businesses went bust a day in 2022, figures reveal

More than five restaurant businesses a day went bust across England, Wales and Scotland in the last year as insolvencies reached their highest level in more than a decade.

Data from accountancy firm Price Bailey showed a 65% increase in restaurant insolvencies, with 1,880 businesses declared insolvent in 2022, compared to 1,139 the previous year.

Matt Howard, head of insolvency and recovery at Price Bailey, said: "Restaurants are facing bracing economic headwinds. Soaring inflation is leaving consumers with less money to spend on eating out, which hit restaurants just as government support was being phased out.

"Restaurants are struggling with rising wage and food costs. Many are finding it difficult to pass those costs on to diners who are feeling the squeeze from rising energy and food bills themselves.

"The upper end of the sector in London is facing less pressure than the mid-range casual dining market. Many high streets are over-saturated with chain restaurants, which are competing for a dwindling number of customers. With margins still being squeezed we will continue to see the less viable businesses and sites in the sector under threat of closure."

Earlier this month Byron was bought out of administration, with almost half of its restaurants closing. Healthy café and juice bar chain Crussh was also bought out of administration in the same month, having been "significantly impacted" by the pandemic.

Price Bailey has predicted more distressed businesses are likely to fall into administration in 2023 as food price inflation and rising interest rates add additional pressure.

In December, figures from advisory firm Mazars revealed the amount that restaurant owners have been forced to lend to their own businesses to keep them afloat had risen by 12% in the previous year.