UK restaurant sector hit by cost of living and Covid legacy

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Stuart Devine thought his chain of fish and chip restaurants in Aberdeen had survived the worst when the UK government lifted Covid-19 lockdowns for good in spring 2021 and customers returned to enjoy the classic British meal.

But before the Ashvale could fully recover it was dealt another blow, when Russia’s full-scale invasion of Ukraine in February 2022 disrupted global supply chains and sent energy and food prices soaring.

“Things are really tough — you are basically coming to work every day to try and survive, to keep people’s jobs alive”, said Devine, whose weekly bill for oil and wheat has jumped by about £1,000 since the invasion. After almost 40 years, he added, “business has never been harder”.

Devine’s struggles are shared by roughly 40 per cent of UK restaurant owners, who are operating at or below break-even point, after the sector was hit by a perfect storm of pandemic shutdowns and the cost of living crisis, according to data from UKHospitality. 

The trade body estimates that up to 30 per cent of businesses in the sector have closed since Covid struck. About 1,169 restaurants shut in the past year alone, equivalent to more than three a day, according to UKHospitality and consultancy CGA by NIQ.

“The money coming from the front door is just not enough to offset the significant cost of doing business that the restaurants are facing,” said Kate Nicholls, chief executive of UKHospitality.

While energy prices have fallen from their peak over the past 12 months, restaurants continue to bear the brunt of elevated food costs. The particularly labour intensive industry has also struggled with staff shortages, worsened by Brexit, and to keep pace with the statutory minimum wage. It…