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Centre for Retail Research predicts tough year for casual dining sector

Centre for Retail Research predicts tough year for casual dining sector

During 2018, over 10,000 jobs were lost in restaurants throughout the UK. It is predicted that 2019 will see more pain in the industry in spite of lower business rates for smaller operators.

The casual dining crunch saw 30 people a day lose their jobs during 2018 through administrations, CVAs and rationalization, a study by the Centre for Retail Research has revealed. 

Gourmet Burger Kitchen, Carluccios, Prezzo, Chimichanga, Byron and Jamie’s Italian were among a host of big-name restaurant chains that all closed outlets last year shedding jobs as the sector grappled with overcapacity and rising operational costs.  

End of year figures by the Centre for Retail Research show that there were a total of 10,413 job losses across the entire casual dining sector in the UK during 2018 with Professor Joshua Bamfield saying each one of the job losses was a “personal tragedy” for the people involved. 

Real estate adviser Altus Group says property taxes through business rates in England and Wales for restaurants were £564.70 million during 2018/19, up by 23.3% representing a two-year cumulative increase of £106.64 million since the controversial revaluation came into effect in April 2017. 

“There has been huge growth in the casual dining market with restaurant numbers up 16% overall since 2010,” commented Alex Probyn, President of UK Expert Services, Altus Group. “The race for space pushed up rents impacting on rateable values that came into effect in 2017. Extra tax for business rates coupled with rising food prices and staff costs through increases in both the national and minimum wages created a lethal cocktail as margins were squeezed.”

Small restaurants in England, those with a rateable value of less than £51,000, will see their business rates bills cut by a third in April through measures taken by the Chancellor at the Autumn Budget to address the squeeze, although the help is likely to be severely limited for those restaurants operated by chains given the €200,000 three-year EU state aid cap. 

Despite the Budget measures, the Centre for Retail Research forecast that a further 10,950 jobs will be lost across the casual dining sector in the UK in 2019, up 5% with independent restaurants being hit hard.

“Many of the large chains have already made cuts and, in 2019, we expect the smaller and independent restaurants to bear the weight of the losses,” concluded Bamfield.

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