Many would be surprised to read that 33% of the UK’s largest restaurant groups are losing money. About 35 of the biggest 100 restaurant chains are losing money this year, as compared to 20 last year according to UHY Hacker Young. Carluccio’s is the newest chain to cry for help, bringing in KPMG to help with restructuring options. This chain has about 100 restaurants in the UK and have had profits fall by more than 80% in the year to September 25, 2016.
Both Byron and Jamie’s Italian have Company Voluntary Arrangements and Prezzo is closing a third of its 300 stores. UHY Hacker Young has pointed to many factors to account to the change. There is a saturation in the market and the rise in the National Minimum Wage has also taken its toll. As Peter Kubik of UHY Hacker Young said,
“Pressures on the restaurant sector have been building for years, and the last year has pushed a number of major groups to breaking point. With Brexit hanging over consumers like a dark cloud, restaurants can’t expect a bailout from a surge in discretionary spending. Consumers only have a finite amount of spending power when it comes to eating out, and the oversaturation of the market means that groups that fall foul of changing trends can very easily fail.