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Administrators getting rich off restaurants after quarterly spike in insolvencies

Albion cafe and restaurant

The number of companies in the pubs, restaurants and clubs sector that fell into administration during Q3 almost doubled on the previous quarter, new figures show.

A study of notices in the London Gazette indicates a difficult period for UK organisations across the board, with a total of 417 companies falling into administration between July and September 2019, an increase of over a third from the previous quarter.

Out of that, 26 were from the restaurant sector, compared with 14 in the previous three months, according to KPMG analysis.

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High-profile cases include the pre-pack administration of Cabana Restaurants, Spud-U-Like and All Star Leisure.

Licenced restaurants were hardest hit, accounting for more than half of the 26 insolvencies; however, pubs fared better over the last quarter with four companies going into administration.

Paul Berkovi, director in restructuring at KPMG, said: “It is no surprise that in today’s economic climate, customers are being more cautious about how they spend the pounds in their pocket.

“On top of dwindling consumer confidence, the hospitality industry also has to contend with rising overheads, fluctuations in exchange rates and increasing employments costs. Combine this with general political uncertainty making future planning extremely difficult and it is a perfect storm which is hitting the sector hard.”

Top 100 restaurant groups see £157m wiped from profits in one year

Tags : administrationInsolvenciesresearch
Andrew Seymour

The author Andrew Seymour

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