Search
The Caterer

Profits at UK's highest turnover restaurant groups fall by 80%

29 October 2018 by
Profits at UK's highest turnover restaurant groups fall by 80%

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."

Gourmet Burger Kitchen seeking CVA with 17 sites earmarked for closure>>

Wimbledon Strada closed due to ‘disappointing trading and rising costs'>>

Martin Williams reports covers on the up after Gaucho overhaul sees cow hides banished and prices cut>>

2019 Acorn Scholarship open for entries: nominate your high-achiever now!

The Caterer Breakfast Briefing Email

Start the working day with The Caterer’s free breakfast briefing email

Sign Up and manage your preferences below

Thank you

You have successfully signed up for the Caterer Breakfast Briefing Email and will hear from us soon!

Jacobs Media Group is honoured to be the recipient of the 2020 Queen's Award for Enterprise.

The highest official awards for UK businesses since being established by royal warrant in 1965. Read more.