Top 100 restaurant groups return to profitability research reveals

Monday, January 9, 2023

Britain's 100 biggest restaurant groups are back in profit after four years at a loss, but are still in a "danger zone" is being warned by accountancy firm.

"The UK's top restaurant chains finally posting a profit, however small, is a welcome surprise," Peter Kubik

Research from UHY Hacker Young revealed that restaurant groups could make a profit of £19.9million in 2022, compared with a loss of £653million by 2021, a loss of £246million by 2020 and a £228 million loss in 2019.

Peter Kubik, a partner at UHY Hacker Young, said part of the uptick was due to restaurants scaling back their expansion plans, which were faltering as a result of the pandemic.

However, with the profit margin coming in at less than 0.5p on revenue of £5.2b, the group has expressed concern that the cost of living might slow the recovery.

Last November Mazars reported that the bankruptcies of restaurant businesses increased by 59% throughout the year, from 984 to 1.567.

It came after Chancellor Jeremy Hunt told business groups such as UKHospitality and the British Beer and Pub Association that the current level of Energy Bill support to firms is 'unsustainably expensive' and is unsustainable at the current pace.

Kubik said higher-performing food groups are rapidly able to cap borrowing costs by using derivatives and agreeing long-term energy prices with suppliers.