The crisis in the casual dining sector - Resolve Group UK

The crisis in the casual dining sector

Resolve Group UK

Crisis in the Casual Dining Sector

In 2017 the number of UK restaurants going into administration jumped by 20% to almost 1000 as major chains came under pressure from rising costs and competition amid a squeeze on consumer spending.

The pain has continued throughout 2018 as a number of established chains have already announced their intentions to close sites including Strada,  Jamies Italian, Byron, Cau, Carluccios, Barbecoa and recently Vilandry.

Higher business rates, rising wage costs, increased competition, and a weaker pound causing price increases from suppliers have all been held responsible.

Decreasing consumer confidence due to on-going economic uncertainty also means there is a simply a tendency to spend less on eating out.

The restaurant sector is generally volatile as diners are seldom loyal and often drawn to the next new concept so fortunes can change very quickly. 

Any further increase in rates or rents will also have a significant detrimental effect, making businesses unsustainable. General demands for fixing or reducing business rates are so far falling on deaf ears.

The situation is similar in the licensed trade with an estimated 18 pubs closing every week as people increasingly stay at home.

These latest statistics from CAMRA show there were 476 pub closures in the first six months of 2018, 13 more than in the last six months of 2017. Rising costs similar to those faced by the casual dining sector and exacerbated by the high cost of beer duty, are held responsible. Consumers are increasingly tending to purchase alcohol from supermarkets and drink at home. In addition, young people (aged 16 – 24) are generally consuming less alcohol.

Recently ReSolve has:

  • been appointed administrator of Hummus Brothers Limited.
  • successfully completed the sale of Crab Tavern, a restaurant in the City of London.
  • agreed short-term finance for an operator of managed and tenanted pubs in Northern England – facilitating the restructure of its group and enabling it to return to positive cash flow.

Our demonstrable expertise in this sector enables us to achieve the best possible outcome for the benefit of the business experiencing difficulties.

Our partner-backed investment fund gives us the flexibility to make decisions quickly and efficiently, enabling clients to respond rapidly to their commercial situation and facilitate their desired outcomes.

If anyone in this sector is experiencing difficulties and would like to discuss options, without charge or obligation, please contact us.

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