Food Sector on the Brink of Collapse

There were warnings this week that the food sector is on the brink of collapse. The governments Autumn budget really needs to step up. The number of restaurant and food outlets going into liquidation nationally increased by 46% in the quarter to September 2022.

Not only are people cutting back on expenses as the cost of living rises; but businesses themselves are struggling to keep up with the rising cost of resources. Ingredients, day to day costs, and energy bills are much more than they were last year.

Celebrity chef Michael Caines will this month close his restaurant Harbourside Refuge. Two years after opening. He said: ” A 130% rise in energy bills, produce prices, staff shortages and a drop in summer staycations had contributed to a calculated decision to close to reduce losses. It’s been the worst two years of my life, I’ve never known anything like it.”

He added “A lot of my colleagues have said it’s horrendous. People who have been doing this for a long time are just broken and finding it difficult to stay positive.”

Sacha Lord, who is one of three night time advisers across the UK, warned that the data signals an impending collapse in the food sector. He has once again urged the Government to support businesses in its upcoming Autumn Budget.

He said, “The data we have received today is just the tip of the iceberg. It shows a very worrying trend which we believe will only get worse over the months to come.”

The Support Needed

The government needs to urgently provide business rates relief and VAT reductions to the hospitality and food sector if they stand a chance of surviving.

Liquidation also need not be the first port of call when facing struggles. If you are owed businesses debts; there are companies that offer business rescue services that are worth reaching out to before you pull the plug. As always, if you need support, get in touch for a free consultation at info@insolvencyandlaw.co.uk.