“Oversaturation” of the market, rising businesses rates, and higher staff costs were cited as some of the reasons for the slashed profit margins according to accountancy group UHY Hacker Young who compiled the data.
Jamie’s Italian, Strada, Byron and Prezzo are just some of the sector’s best-known names that have announced store closures in recent weeks and UHY Hacker Young says that there is “little respite on the horizon.”
Jamie Oliver closed 12 of his Jamie’s Italian restaurants. Meanwhile, high-end burger chain Byron is also set to close up to 20 of its 67 branches.
Pizza chain Prezzo has also announced plans to close about a third of its outlets (around 94 restaurants) in an attempt to cut costs.
UHY's Peter Kubik said: "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."
He added that “consumers only have a finite amount of spending power when it comes to eating out” and that “oversaturation of the marker means that groups that fall foul of changing trends can easily fail.
The accountancy firm also blamed the UK Government for soaring 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.”
On top of this, rising food costs worsened by the weak value of the pound has also been blamed for increasing pressures.