Member Article

Healthy appetite for Yorkshire’s restaurants

Diners in Yorkshire are ensuring that the region continues to enjoy a wide choice of restaurants, with the sector seeing falling levels of businesses at higher than normal risk of insolvency according to the latest research by R3.

The post-Christmas period is often one of the toughest times of the year in the restaurant trade, but in February just 23.4% of restaurants in Yorkshire were deemed to be at higher than normal risk, close to the national average of 23.2%. Of the 4,158 active businesses in the sector in Yorkshire, only 32 were considered to be at high risk and 973 were in the overall negative band.

Of the 11 regions surveyed across England, Wales, Scotland and Northern Ireland, the strongest performer was Scotland with just 21.7% of restaurants at higher than normal risk; and the weakest was the East Midlands with 25% of businesses in the sector at risk.

Adrian Berry, chair of R3 in Yorkshire and restructuring partner at Deloitte LLP, commented: “The way in which restaurants are faring is often a reasonable barometer of the mood of consumers as this type of discretionary spend tends to be the first to go when people start to feel the pinch.

“While it is reassuring to see that the sector in Yorkshire remains robust, the UK’s high streets are increasingly being filled by national chains. Not only do these chains benefit from economies of scale, they also represent a safer option for landlords, making it difficult for individual restaurants to compete in what is an extremely tough sector.

“What’s more, the increase in the National Living Wage combined with Business Rates reforms, as well as the impact of Brexit on access to overseas workers, are also likely to put more of a strain on our hospitality industry with smaller business being hit harder. As ever, our advice is to seek the advice of an insolvency and restructuring professional at the first signs of trouble.”

R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.

This was posted in Bdaily's Members' News section by Emma Kilmurray .