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Minimum wage increases will pile pressure on ‘besieged restaurant sector'

09 May 2018 by
Minimum wage increases will pile pressure on ‘besieged restaurant sector'

Increases to minimum wage will put more pressure on an "already besieged restaurant sector" according to financial analysts Company Watch.

The firm examined accounts filed with Companies House by 324 larger businesses between January 2016 and March 2018 and found that 32.7% were loss-making, with 44.4% falling into its "warning zone".

Among the businesses identified by Company Watch as "high profile loss-makers" were the Casual Dining Group, Leon, Spaghetti House restaurants, c1 2014 Limited (parent company of Carluccio's), Five Guys and Various Eateries Limited (parent company of Strada).

The businesses' report, Industry Watch restaurants, reads: "The increases in the national minimum wage, which came into force on 1 April 2018 will put even more pressure on this already-besieged sector."

Company Watch has predicted that the minimum wage increase will add an extra £120m to the sample group's wages bill, a rise of 4.7%.

The report comes after the Insolvency Service said restaurant insolvencies have increased by 20% between 2016 and 2017.

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