More than 11,000 workers in UK restaurants lost their jobs last year amid another swathe of closures as woes in the sector saw the likes of Jamie’s Italian bite the dust.
Figures compiled by the Centre for Retail Research reveal there were 11,280 job losses in the casual dining sector in 2019 – up 8 per cent on the previous year.
Employment across the sector was hit hard as a raft of well-known names suffered another torrid year, with TV chef Jamie Oliver’s restaurant empire the biggest casualty after it collapsed in May with the loss of 1,000 jobs.
There were also a host of other high-profile restaurants forced to shut sites or seek rescue deals as they battled another year of stagnating sales, overcapacity and rising costs.
The data shows another 922 restaurants were shut in 2019, which comes after 1,188 closed the previous year.
Last year cake chain Patisserie Valerie called in administrators following an accounting scandal now being investigated by the Serious Fraud Office, while the owner of Giraffe and Ed’s Easy Diner announced plans to close a third of its outlets.
Property adviser Altus Group said the sector has been hit by a “lethal cocktail” of rising costs and tax hikes.
Food prices have been sent soaring by the fall in the value of the pound since the EU referendum, while staff costs have surged due to rises in the minimum wage. Property taxes have also increased.
This has all come at a time of rising competition due to over-expansion by a number of restaurant chains, while consumer confidence has been dented by Brexit uncertainty. However, despite the recent closures, restaurant numbers are still up by 16 per cent compared with 2010.
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.”
The Centre for Retail Research said independent restaurants suffered the most in 2019 and are likely to bear the brunt again this year.
Its data shows 585 independent restaurants shut in 2019, while 337 chain-operated eateries were axed.
Professor Joshua Bamfield, a director of the Centre for Retail Research, said: “The main problems in 2020 are likely to be found among the independents, who often lack the resources to reinvest or change their business model.”