The casual dining crunch saw 30 people a day lose their jobs during 2018 through administrations, CVAs and rationalisation – and a similar figure is likely for 2019, a leading think-tank has claimed.
Gourmet Burger Kitchen, Carluccio’s, Prezzo, Chimichanga, Byron and Jamie’s Italian were amongst a host of big name restaurant chains that all closed outlets and shed jobs during the year as the sector grappled with overcapacity and rising operational costs.
A final yearly count-up by the Centre for Retail Research shows that there were a total of 10,413 job losses across the entire casual dining sector in the UK during 2018, with professor Joshua Bamfield describing each one as a “personal tragedy” for the people involved.
The number of job losses is predicted to rise to more than 11,000 in 2019, although it will be independent operators – as opposed to the chains – that are expected to bear the brunt.
Real estate adviser Altus Group say property taxes through business rates in England and Wales for restaurants were £564.70m during 2018/19, up by 23% and representing a two-year cumulative increase of £106.64m since the controversial revaluation came into effect in April 2017.
Alex Probyn, president of UK expert services at Altus Group, said: “The race for space pushed up rents impacting on rateable values which came into effect in 2017. Extra tax for business rates coupled with rising food prices and staff costs through increases in both the national and minimum wages created a lethal cocktail as margins were squeezed.”
Small restaurants in England, those with a rateable value of less than £51,000, will see their business rates bills cut by a third in April through measures taken by the Chancellor at the Autumn Budget to address the squeeze although the help is likely to be severely limited for those restaurants operated by chains given the €200,000 (£180,000) three-year EU state aid cap.
Despite the Budget measures, the Centre for Retail Research forecasts that a further 10,950 jobs will be lost across the casual dining sector in the UK in 2019, up 5% with independent restaurants being hit hardest.
Professor Bamfield added: “Many of the large chains have already made cuts and, in 2019, we expect the smaller and independent restaurants to bear the weight of the losses.”