A fifth of Britain's restaurants are showing signs they could go bust, according to research released today.
Almost 15,000 eateries are facing a real insolvency threat as rising staff costs and the fall out of Brexit put a strain on the sector.
Over half of all food is imported, with three-quarters coming from the EU. Such imports have become increasingly costly for restaurateurs with sterling more than 10 per cent weaker against both the Euro and US dollar since the Brexit vote.
In addition, a rise in business rates will hit 42 per cent of restaurants in London, accountants Moore Stephens said.
Leading trade body the Associated of Licensed Multiple Retailers (ALMR) said the eating and drinking out sector is facing a £213m tax hike through increases in rates and duty.
“This research acutely demonstrates the unique pressures that eating and drinking out businesses are currently facing. With Brexit on the horizon, next month’s Budget is absolutely crucial for the sector as cost pressures are rising at a time of maximum uncertainty for employers," said ALMR chief executive Kate Nicholls.
She continued: “The government has the power to provide support for these businesses that will ease pressure, provide stability and help them unlock even greater potential."
Moore Stephens partner Jeremy Willmont said: ‘’In such a competitive market, restaurants need to be wary of building up losses and debt now in the hope of future profits, as the industry looks to be facing a prolonged period of tough trading conditions."