According to a recent report, the hospitality industry represented 6% of the businesses that filed for administration in the first half of the year.
Out of a total of 620 businesses that filed for administration between January and June 2022, there were 39 hospitality companies, which included breweries and restaurant chains. This marks a 60% increase for the industry when compared to the same period last year.
Matt McDonald, partner and food and drink sector lead at Shakespeare Martineau, commented:
"The latest figures make depressing, if unsurprising, reading. Most businesses have suffered to some extent over the past two years, but some businesses within the food and drink sector have been particularly hard-hit – not least those in the hospitality sector like restaurants and pubs.”
Although businesses had support packages during the pandemic, after withdrawing them, the number of companies in bankruptcy has increased significantly. Other factors that have contributed to this scenario are the war in Ukraine and the current global inflation crisis. Rising food prices and cost of living have put pressure on customers resulting in reduced spending.
Additionally, banks and HRMC are becoming more and more cautious in dealing with the financial demands of businesses. As warned by experts, the current scenario could get worse, leading to more companies going through insolvencies and closures.