Losses at UK’s top restaurants jump to £151m
Losses at the UK’s top 100 restaurants increased to £151m last year, a figure that will only worsen as the industry grapples with the impact of the coronavirus.
Figures from accountancy group UHY Hacker Young show a 94 per cent increase in losses, from £78m the year before.
The government has tentatively set out plans for restaurants to reopen on 4 July but this would likely be at reduced capacity to ensure social distancing measures are met. And even once lockdown is lifted, there are concerns consumers will feel uncomfortable returning.
Industry groups have lobbied the government for some change in the social distancing measures to ensure it is financially viable to reopen. Appearing in front of the Liaison Committee the Prime Minister indicated pubs and restaurants could reopen earlier than anticipated, and that he had asked government scientists to review the two metre rule.
“On hospitality we are really trying to go as fast as we can. It is really difficult to bring forward hospitality measures in a way that involves social distancing,” he said. “But I am much more optimistic about that than I was. We may be able to do things faster than I previously thought.”
Regardless of when restaurants can reopen, it will be some time before they can return to normality and they are likely to incur additional costs in the meantime.
An anticipated move to contactless payments means some restaurants may need to invest money into card machines and incur transaction fees. While some companies fear the payments they’ll have to make when rent holidays come to an end on 30 June.
UHY Hacker Young notes that there will also be a wave of insolvencies later this year, when the furlough scheme comes to an end. The accountancy firm adds that the use of company voluntary arrangements (CVA) could become more prevalent.
CVAs involve agreeing payment of debt with creditors over a fixed time period, in order to continue trading.
Last month, restaurant chain Carluccio’s cut more than 1,000 jobs after being bought out of administration Boparan Restaurant Group.
Partner Peter Kubik said: “Restaurants face big upcoming bills to deal with the post-lockdown period. It is essential they start putting in place cash management measures as soon as possible to ensure they have enough working capital to meet them.”