Express & Star

Oversaturation and minimum wage blamed for restaurant failures

It noted recent closures announced by chains including Prezzo, Jamie’s Italian and Strada.

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A Jamie’s Italian restaurant (Nick Ansell/PA)

A third of the UK’s top 100 restaurant groups are loss-making, up by 75% in the past year, a new study shows.

Increases in the National Minimum Wage and an “oversaturation” in the market were partly to blame, said accountancy group UHY Hacker Young.

Peter Kubik, of UHY Hacker Young, said: “More than a third of the biggest companies in the restaurant sector are losing money, and there is little respite on the horizon.

“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.

“The Government has ratcheted up costs with a series of above-inflation rises in the minimum wage, and we are just weeks away from another 4.4% rise in April. That will be tough for a lot of restaurants to absorb.”

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