Tough six months ahead for restaurant sector

The UK restaurant sector can expect a tough first six months of 2002, says the latest report from consultant Ernst & Young.

According to the report, the downturn in the global economy combined with a significant decline in overseas visitors will "put the squeeze on less robust competitors" over the next six months.

Dave Murray, head of corporate finance (leisure) for Ernst & Young, said: "The operating environment in terms of property, legislation and cost base is becoming tougher day by day."

He added: "The next six months will see the elimination of weaker operators. It is getting rough out there."

But in the long-term Ernst & Young says the outlook for the industry is bright.

"The combination of increasing disposable income and rising numbers of affluent consumers means that this is a good long-term bet," said Murray. "Those operators which remain ahead of the game, by taking customer service seriously and constantly developing new themes and ideas, will reap a highly lucrative reward."

The restaurant sector has already seen several high-profile victims of the downturn in business this year. Neat's restaurant at London's Oxo Wharf Tower, and the Buttery in Glasgow both closed last month. Neat's had been open for less than eight months.

Further closures this year have included Rhodes & Co in Edinburgh, Livebait in Chelsea, west London, and Marco Pierre White's Oak Room at Le Méridien hotel, Piccadilly, central London, although the closure of the latter was said not to be for economic reasons.