Crisis hits restaurants as diners decide to stay home

Celebrity chefs suffer as recession forces closures and reduced trading hours

Restaurants are closing at the fastest rate in decades as people economise on eating out during the recession, industry figures reveal.

Data given to The Independent shows the recession has badly bruised food outlets, with diners spending £330m less on sit-down meals and takeaways in the first half of this year. In the £19bn-a-year sector – whose margins average 5 per cent – independent restaurants have been worst affected, while branded groups have lured customers with half-price offers that have hit profits.

However, even branded chains have been quietly closing outlets, shedding staff and "re-engineering" meals with smaller portions or cheaper ingredients, according to the British Hospitality Association. Industry experts said the restaurant business was experiencing its toughest time since the 1980s.

Some 324 eating-out businesses went under in the first six months of the year, more than double the 164 two years ago, according to insolvency figures from PricewaterhouseCoopers. PwC, which monitors the restaurant sector, predicted that closures would increase rapidly in the second half of the year because banks had given up hope of revenue-boosting summer weather.

The slump in spending has hit some of the most famous names in the business. In February, Antony Worrall Thompson closed four restaurants after he said Lloyds Bank had refused him a £200,000 overdraft extension and TV chef Jean Christophe Novelli placed two gastro-pubs in administration. In October, Tom Aikens shut the business that ran his eponymous Michelin-starred restaurant and another in Chelsea, London, although they were controversially brought back, to the disgust of suppliers left with large debts.

The decline has slammed the brakes on almost 20 years of strong growth in eating out, which was only dented in 2002 and 2003 after the dotcom crash and the 11 September terror attacks.

Horizons, a specialist restaurant researcher, said that in the first half of the year spending in table service restaurants fell 3.9 per cent to just over £4bn compared with last year. Spending at "quick service restaurants" – fast food outlets, takeaways and cafes – fell by 3.3 per cent, from £5bn to a little over £4.8bn.

Horizons' managing director Peter Backman said he was surprised the closures had not been greater. He said: "It's going to get really nasty in the restaurant sector now. Everybody is talking about reduced trading weeks. Monday to Thursday are quite empty. Lunchtimes in business areas are down; Sundays are down. Saturday is increasingly the day that will prove whether restaurants stay in business."

Customers are still spending in chains such as Pizza Express, Zizzi, and Strada by taking advantage of "2 for 1" offers, but these have masked the full extent of the pain in the industry and raised the pressure on independents.

According to PricewaterhouseCoopers the number of dining firms going out of business in the first quarter of this year was 186, two and half times the 72 in the first quarter of 2007. In the second quarter of this year insolvencies slowed to 138.

Stephen Broome at PricewaterhouseCoopers, said: "We think it's because now the real basket cases have fallen by the wayside lenders have taken a more supportive stance towards the sector, particularly at the time that everyone was talking about a barbecue summer and staycations.

Asked if the downturn was worse than the early 1990s, Miles Quest, of the British Hospitality Association, said: "From anecdotal evidence, it's worse. The restaurants that survive this recession will offer outstanding value."

News
people And here is why...
Arts and Entertainment
Amazon has added a cautionary warning to Tom and Jerry cartoons on its streaming service
tv
Voices
voicesBy the man who has
Sport
Arsene Wenger tried to sign Eden Hazard
footballAfter 18 years with Arsenal, here are 18 things he has still never done as the Gunners' manager
PROMOTED VIDEO
Life and Style
ebooksA superb mix of recipes serving up the freshest of local produce in a delicious range of styles
Life and Style
ebooksFrom the lifespan of a slug to the distance to the Sun: answers to 500 questions from readers
Life and Style
The new Windows 10 Start Menu
tech
Arts and Entertainment
Kristen Stewart and Robert Pattinson star in The Twilight Saga but will not be starring in the new Facebook mini-movies
tvKristen Stewart and Stephenie Meyer will choose female directrs
Arts and Entertainment
Hilary North's 'How My Life Has Changed', 2001
books(and not a Buzzfeed article in sight)
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Arts and Entertainment
There has been a boom in ticket sales for female comics, according to an industry survey
comedyFirst national survey reveals Britain’s comedic tastes
Arts and Entertainment
Twerking girls: Miley Cyrus's video for 'Wrecking Ball'
arts + ents
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Food & Drink

    Management Accountant

    28,000 to 32,000 per annum: Accountancy Action: Our client, a hospitality busi...

    Food and Beverage Cost Controller

    18,000 to 20,000 per annum: Accountancy Action: Our fantastic leisure client i...

    Marketing Analyst / Marketing Executive

    £20 - 24k: Guru Careers: A Marketing Analyst / Marketing Executive is needed t...

    IT Administrator - Graduate

    £18000 Per Annum: Clearwater People Solutions Ltd: ***EXCELLENT OPPORTUNITY FO...

    Day In a Page

    Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

    The children orphaned by Ebola...

    ... then rejected by surviving relatives over fear of infection
    Pride: Are censors pandering to homophobia?

    Are censors pandering to homophobia?

    US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
    The magic of roundabouts

    Lords of the rings

    Just who are the Roundabout Appreciation Society?
    Why do we like making lists?

    Notes to self: Why do we like making lists?

    Well it was good enough for Ancient Egyptians and Picasso...
    Hong Kong protests: A good time to open a new restaurant?

    A good time to open a new restaurant in Hong Kong?

    As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
    Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

    Paris Fashion Week

    Lagerfeld leads a feminist riot on 'Boulevard Chanel'
    Bruce Chatwin's Wales: One of the finest one-day walks in Britain

    Simon Calder discovers Bruce Chatwin's Wales

    One of the finest one-day walks you could hope for - in Britain
    10 best children's nightwear

    10 best children's nightwear

    Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
    Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

    Manchester City vs Roma

    Five things we learnt from City’s Champions League draw at the Etihad
    Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

    Trouble on the Tyne

    Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
    Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

    Isis an hour away from Baghdad -

    and with no sign of Iraq army being able to make a successful counter-attack
    Turner Prize 2014 is frustratingly timid

    Turner Prize 2014 is frustratingly timid

    The exhibition nods to rich and potentially brilliant ideas, but steps back
    Last chance to see: Half the world’s animals have disappeared over the last 40 years

    Last chance to see...

    The Earth’s animal wildlife population has halved in 40 years
    So here's why teenagers are always grumpy - and it's not what you think

    Truth behind teens' grumpiness

    Early school hours mess with their biological clocks
    Why can no one stop hackers putting celebrities' private photos online?

    Hacked photos: the third wave

    Why can no one stop hackers putting celebrities' private photos online?