Positive trading over the festive season has failed to save a number of operators who have closed restaurants or revealed plans to sell sites early in 2019.
The Coffer Peach Business Tracker has revealed that like-for-like sales in the six weeks covering Christmas and New Year were up 4.1% on 2017, with pubs seeing the largest seasonal uptick of 5.1%, but restaurants recording a healthy 2.4% increase.
Mark Sheehan, managing director of Coffer Corporate Leisure, said: “The fact is the eating and drinking-out sectors had an excellent trading period in their busiest time of the year. Consumers escaped the political turmoil and headed for pubs and restaurants to escape the tedium. Pre-booked sales in particular were strong and the months ahead are going to be tough but at this crucial time trading was robust.”
Despite this, the early weeks of 2019 have seen reports of a number of restaurant closures, including Michael Carr’s Restaurant 92 in Harrogate, North Yorkshire, and Wallfish and Wellbourne Bistro in Bristol. Meat Liquor Brixton also announced its closure – although the group says another site is being sought – and Polpo Notting Hill as well as Polpetto in Soho were both placed in the market, although continue trading at this time.indu
Analysis of the regions has revealed that a host of restaurants, including many independents, have also closed their doors in locations including Plymouth, Harpenden, Brighton, Birmingham, Lancashire, Gateshead, Reading, Shropshire and Cardiff.
David Abramson, chief executive of consultancy the Cedar Dean Group, told The Caterer he would expect to see closures at the start of the year, especially with increased uncertainty in the market and the threat of a quiet January. He explained: “Christmas was actually quite good, but January will be a lot harder and people know they are in for uncertain times ahead.
“Independents are naturally more cautious because it’s their own money and they have their necks on the line.”
Paul Newman, head of leisure and hospitality at auditor RSM, said the firm’s restructuring team was as busy as it had been 12 months ago during the casual dining crisis. He was not surprised to see many independents among the closures, particularly as they would face large costs at the start of the year.
Newman explained: “It’s a typical time of year for businesses to close the shutters – that’s always been the case. You may have had a strong December, but the challenge is what it’s going to be like for the next three to six months.
“We’ve now got additional Brexit uncertainty. We’ve already seen consumer sentiment hitting the retail sector. It’s more challenging out there for operators and I can’t see it getting any easier in the short term.
“If you’re running a successful, profitable business there are opportunities out there, but it’s probably more challenging now than it was 12 months ago, which is why I think we’re seeing more closures now than we have done historically.”