Restaurants in Yorkshire perform above national average
Despite a spate of high profile administrations in the casual dining sector, restaurant companies in Yorkshire are remaining resilient, with a lower percentage at higher than normal risk of insolvency than in many other parts of the UK.
The latest research from insolvency body R3 shows that in September 32.8% of Yorkshire restaurants were considered to be at higher than normal risk of insolvency, below the national average which saw 34.2% in the overall negative band. Looking at other parts of the UK, the North East restaurant sector put in the strongest performance with just 30.8% in the negative band, while restaurants in the South East fared worst with 36.4% at higher than normal risk.
R3’s research found that this month 1,964 of the 5,986 active restaurants in Yorkshire were above normal risk, a rise of less than 1% since August.
Overall, Yorkshire is showing signs of recovery from the tough economic conditions it faced in 2017. In September, manufacturing, construction, professional services, technology and IT, and agriculture in the region all saw month on month rises of less than 1% in the higher risk band, while tourism operators saw a fall of 1.5%. Across all of the 11 sectors surveyed, Yorkshire experienced an increase in the negative band of just 0.19%.
Eleanor Temple, chair of R3 in Yorkshire and a barrister at Kings Chambers in Leeds, commented: “Over the last year, restaurants have experienced a number of closures, rescues and restructuring, particularly in the casual dining sector, with high street eateries from Jamie’s Italian and Cau to Byron Burger just some of the big names which have been affected. However, overall the number of casual dining restaurants is continuing to grow with new challenger brands focusing on expansion, and it is positive to see Yorkshire’s restaurants holding their own in what remains a very tough sector. Given the amount of competition, together with increasing business rates, rent, food and labour, pressure on profit margins continues to be a major issue.”
Ms Temple continues: “Looking at the bigger picture, despite ongoing uncertainty, the British economy seems to be holding its solid pace of growth although Brexit is continuing to hit investment plans and confidence. Any businesses seeing signs of distress would be well advised to seek professional advice as early as possible when more options are available to prevent problems from escalating.”
R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.