Hospitality industry impacted by the cost of living crisis

The new year is bringing challenges for many businesses.

The BBC announced last week that the restaurant chain Byron Burger has said it will close nine restaurants and cut 218 jobs in another restructure of its business. According to the BBC’s analysis of corporate insolvency notices, in December 2022 it found that 320 businesses in the food service industry (including restaurants, pubs, cafés and catering firms) were forced to initiate insolvency procedures, an increase of 41% compared to the same month in 2019, before the Covid-19 pandemic.

In addition to the cost of living crisis having a serious impact on how customers are changing their spending habits, it has been further reported that the rail strikes additionally cost bars, pubs, restaurants and hotels in the UK at least £1.5bn just in December.

For Byron Burger, the BBC reports that by a deal being struck, around 12 sites and 365 jobs have been saved by the remaining restaurants and staff are being transferred to a new company operated by the existing owner through a pre-pack administration.

There are a number of options and steps that businesses can take to alleviate the pressure and improve the stability of your business before it is too late.

Seek advice from IBB and we can discuss your options with you.

The Dispute Resolution team at IBB can advise you on any commercial disputes and help you with your debt collection and credit control practices and our Corporate Restructuring and Insolvency team can provide advice on business recovery where needed.

Speak to one of our specialist lawyers on 0330 175 7621 or email commercialdisputes@ibblaw.co.uk.