The debt burden of the UK's top 30 restaurant groups, including Loungers and Gordon Ramsay Restaurants, has exceeded £3b for the first time, according to a national accountancy group.
Figures from 2022 recorded debt levels at £2.96b, while this year's results were at £3.03b.
Many restaurant groups are facing tightened finances due to rapid expansion and Covid borrowing in the form of BBLs (Bounce Back Loan scheme) and CBILs (Coronavirus Business Interruption Loan scheme), UHY Hacker Young research revealed.
The rising cost of living and the increased interest rates over the past two years have also contributed to the build-up of debt.
The accountancy firm warned that more restaurants could go under if they continue to struggle with a lack of cash flow.
Peter Kubik, partner at UHY Hacker Young, said: "The restaurant sector's debt levels ought to be coming down. It's worrying that it's not already, given the cost of borrowing at present."
"A lot of restaurant groups had worked extremely hard to restructure their debts and shed costs over recent years. These figures suggest that the problem hasn't been fixed yet."
According to figures from the Insolvency Service, insolvencies of restaurant businesses in the UK rose by 44% in the past year, increasing from 1,611 in the year end of September 2022 to 2,109.
The restaurant groups consulted for the UHY Hacker Young debt survey were:
Domino's Pizza Group PLC Troia (UK) Restaurants Limited Loungers UK Limited Loungers PLC Five Guys JV Limited Azzurri Restaurants Limited Azumi Limited Scotco Restaurants Limited Pizza Hut (UK) Limited Wednesdays (Bidco) Limited The Restaurant Group (UK) Limited Fortress Operations Limited South Coast Foods Limited Soul Foods Limited Bills Restaurants Ltd. Itsu Limited Gail's Limited Benugo Limited Dishoom Limited Turtle Bay Hospitality Limited Yo! Sushi UK Ltd The Fulham Shore Limited Gordon Ramsay Restaurants Ltd Haulfryn Group Limited LARS (GFUK) Holdings Limited Giggling Restaurants Ltd Chokdee Ltd Gioma (UK) Limited Christopher Topco Limited Tortilla Mexican Grill PLC
Takeaway franchise groups, pub and bar restaurants, cafés and hotel chains were omitted from the survey.