LOSSES at the UK’s top 100 restaurant groups spiralled amid lockdown and social distancing rules last year.

The continuing impact of the pandemic on the hospitality industry has been underlined by new figures that showed losses at leading groups soared by 174 per cent to £673 million in the year to September. This compared with losses of £246m for the year to September 2020, figures from accountancy group UHY Hacker Young Group.

The figures come as the hospitality trade in Scotland is again operating under restrictions, with the latest rules introduced on December 27 to combat the Omicron variant. Nightclubs have been closed for three weeks, and the one-metre social distancing rule has been introduced to hospitality settings, where table service is now required.

The new rules were brought in after the industry saw huge amounts of bookings cancelled in December because consumers were urged by Public Health Scotland and the Scottish Government to avoid Christmas parties.

UHY Hacker Young Group noted that several major restaurant chains, including Prezzo, Byron Burgers and Carluccio’s went into insolvency during the pandemic, despite Government support. It highlighted the challenges operators were facing over staff shortages amid high level of absences caused by Omicron infections.

Peter Kubik, partner at UHY Hacker Young, said: “The end of lockdown has not resulted in a painless rebound in fortunes for the sector. Many restaurants are struggling to pass on increased food and wage costs to customers which is putting margins back under pressure. Omicron is just the latest set-back for an industry hit hard in the last two years.”

“They are also facing the threat of decreased consumer spending due to April’s increase in National Insurance.”

“The Government has stepped in to help and provided a great deal of support for the sector but it’s likely that even more will be needed, it’s no surprise that the industry is fiercely lobbying for an extension of its lower VAT rate.”

Mr Kubik observed that hospitality business have been finding it harder to recruit staff since Brexit, which has put upward pressure on wages when trading conditions remain “volatile”.

But, while he suggested that more restaurants are expected to become insolvent, it could result in a “helpful recalibration of rents for the hospitality sector”

He added: “With the end of the moratorium on evictions of commercial tenants likely to create even more unoccupied space on high streets, falling rents could entice new entrants into the sector.”