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Q4 restaurant closures highest-ever

Published:  28 February, 2024

Restaurant closures surged to the highest-ever quarterly figure in Q4 2023, according to accountancy firm Price Bailey.

As per data obtained via the Freedom of Information Act, 514 restaurants entered insolvency in Q4 2023, surpassing the previous record of 481 set in Q2 2023. 

A total of 1,932 restaurant businesses went bust in 2023, a 45% increase on 2022 (1,332). This equates to an average of 5.3 restaurant closings per day, up from 3.6 in 2022. 

Among the many factors contributing to closures are persistently high inflation, rising interest and declining consumer spend. 

Price Bailey points out that the Bank of England's interest rate began 2023 at 3.5% but was hiked throughout the year, finishing at 5.25% by December 2023. The government’s £18bn energy support package for businesses began to taper away at the end of Q1 2023 causing a further spike in costs from Q2 onwards.

Other factors include the need to repay Covid-19 support loans and strike action on the railways leaving many restaurants in city centre locations losing out on vital trade at key points in the year.

Matt Howard, head of the insolvency and recovery team at Price Bailey, said: “Restaurant closures hit their highest ever quarterly total in Q4 smashing the record set just six months previously. Many hospitality businesses are on life support, and with the services sector leading the way into recession, business failures in the restaurant trade are likely to continue to rise throughout 2024.”

“The inflation rate for restaurants crept up again in January and hopes of an early rate cut appear to be receding. The first quarter is a much slower trading period for restaurants, which will make it very difficult for many to recover from a lacklustre festive season.”