Britain lost over 500 restaurants in final quarter of 2023

The number of restaurants closing across Britain hit a new quarterly high at the end of 2023, with more than 500 venues shutting down.

Some 514 restaurants across England, Scotland and Wales permanently closed in the final quarter of last year, compared to 481 in Q2 2023, according to data obtained under the Freedom of Information Act by accountancy firm Price Bailey.

Over the course of 2023, 1,932 restaurants entered insolvency, equating to an average of more than five closures per day, up from 3.6 closures per day in 2022.

The number of closures was also up 45% from 2022, when there were 1,332 restaurant insolvencies.

Price Bailey said rising interest rates, high inflation, cash-strapped consumers, the end in government support for energy bills, the repaying of Covid support loans and strike action aggravated insolvency figures during the period.

It comes after a series of notable closures across the hospitality industry in January.

The rise in interest ratse from 3.5% go 5.25% in 2023 meant many highly leveraged businesses in the restaurant trade were unable to meet loan repayments, Price Bailey said.

It warned there would be further insolvencies in future due to banks prioritising businesses with growth prospects, rather than those in distress.

Matt Howard, head of the insolvency and recovery team at Price Bailey, said: “Restaurant closures hit their highest ever quarterly total in Q4 smashing the record set just six months previously.

"Many hospitality businesses are on life support, and with the services sector leading the way into recession, business failures in the restaurant trade are likely to continue to rise throughout 2024.

“As rates have risen banks are piling pressure on restaurants to make capital as well as interest repayments on loans. This has proved the final nail in the coffin for many restaurants.”