Losses at the UK's 100 top-earning restaurant groups increased 112% to £571m last year, rising from reported losses of £269m at the end of last March, says UHY Hacker Young.
According to the accountancy group, these losses only ran up to the start of the first national lockdown and therefore are expected to worsen again in the coming months.
Restaurants have been forced to repeatedly shut their doors over the past year and the impact of three national lockdowns have left many struggling to survive.
The government has supported the industry with schemes such as last summer's Eat Out to Help Out and the furlough scheme. However, trade association UKHospitality has urged the government to do more to help the sector by extending the reduced 5% rate of VAT until the end of 2021 to prevent a wave of redundancies. VAT is scheduled to revert to 20% at the end of March.
UHY Hacker Young added that a wave of restructuring is likely to continue in the restaurant sector, particularly the use of Company Voluntary Arrangements (CVAs) to keep businesses afloat. Many UK restaurant groups have had to launch CVAs, such as The Restaurant Group, Leon, PizzaExpress (pictured) and Yo!, while others have been sold via administrations.
Peter Kubik, partner at UHY Hacker Young, said: "These figures reveal how seriously the UK restaurant industry was already struggling pre-pandemic. The most worrying part is the restaurants will be still having to absorb the impacts of lockdowns for weeks or months to come.
"The government has stepped in to help but it's likely that even more will need to be done – very few industries have been hit as hard as restaurants. At the very least the hospitality VAT cut will almost certainly have to be extended.
"The hospitality industry is on a knife edge – its survival is largely dependent on people feeling safe and returning to restaurants which could be potentially months away."