Restaurants closing doors ‘due to crippling staff shortages and inflation’

The number of restaurant insolvencies has increased sharply in the past year amid staff shortages and rising inflation, according to a new study.

Accountancy firm UHY Hacker said the total jumped from 856 in 2020/21 to 1,406 in the past year.

Peter Kubik, of UHY Hacker Young, said restaurants are facing spiralling inflation, decreased consumer spending and a labour shortage.

Previous research by UHY Hacker Young found restaurants have already seen losses rise to more than £800 million in the past six months as they felt the effects of major restructuring programmes after the pandemic.

Mr Kubik said: “Pressure is rising on the restaurant sector every day. More and more of them are shutting their doors as a result.

“Restaurants that only just managed to survive the pandemic thanks to government support are now facing fresh challenges in the form of rising inflation, a post-Brexit labour shortage and consumers who simply cannot afford to spend as much.

“Smaller restaurants are suffering the most from a shortage of EU staff post-Brexit.

“Many are finding that they simply cannot hire enough staff to serve the number of covers they need to stay profitable.

“That’s one of the reasons for the raft of closures we’re seeing.”