Pre-tax profits at the UK’s top 100 restaurant groups have fallen to a total of £37m, a decline of 80% compared with £194m in 2017, according to market analysis from accountancy firm UHY Hacker Young.
The figure means the top performing groups in the sector have seen a decline in overall profits of 89% since Q1 2017 – when pre-tax figures stood at £345m.
Of the list of the 100 restaurant groups with the highest turnover, 37 were found to be loss-making.
In particular, the analysis put the decline down to the crisis in casual dining, citing losses at Gourmet Burger Kitchen – which confirmed it was seeking a CVA last week – Harry Ramsden’s and Jamie’s Italian, as well as others.
Peter Kubik, insolvency partner at UHY Hacker Young, said: “The downward spiral in profits of restaurant groups reflects the severe difficulties that continue to impact the sector.
“Despite the long-term benefits, closing down restaurants is often hugely expensive in the short-term. For some struggling restaurant groups that means things will get worse before they get better.
However Kubik noted some success stories within the top 100, “such as Wagamama, which opened seven new UK restaurants this year, show that consumer demand for casual dining is still present.
He added: “Similarly, ethically-sourced fast-food chain Leon is expanding into Europe. The restaurants that are doing better are those who are innovating by offering their customers something more unique.”