Healthy appetite for Yorkshire restaurants ahead of Christmas period

Yorkshire’s hospitality sector has continued to perform strongly ahead of the busy Christmas period with the latest research from insolvency trade body R3 revealing, for the second consecutive month, the level of restaurants at higher than normal risk of insolvency has fallen, which outperforms the UK average.

The results highlight that the proportion of Yorkshire restaurants with a higher than normal risk of insolvency in November fell by nearly 0.5% to 38%, faring better than the UK sector as a whole, which saw 40% of restaurants at higher than normal risk – representing a decrease in risk of around 0.2%.

Restaurants tend to have one of the highest insolvency risks of the sectors tracked.

These latest figures show that 1,114 of the region’s 2,988 active restaurants are considered to have a higher than normal risk of insolvency. This makes the region’s restaurant sector the fifth best performing of the 12 regions surveyed across England, Wales, Scotland and Northern Ireland.

Adrian Berry, chair of R3 in Yorkshire and restructuring partner at Deloitte LLP, commented: “These latest figures show that the region’s restaurants are entering their busiest time of the year in a relatively healthy position which is particularly reassuring as January is traditionally a tough time in the sector. In the New Year, not only do restaurants tend to suffer from a curb in consumer spending after festive excesses, they are also faced with the challenge of rent quarter day.

“We are fortunate that the region is well-served by a varied restaurant scene and, notably, has the largest number of Michelin starred restaurants of any county. Added to that, recent announcements from a number of highly acclaimed restaurant operators that they will be opening new ventures in the region means the outlook for 2016 looks promising.”

Overall, November was a poor month for recovery across most sectors in Yorkshire and across the UK. The restaurant sector was one of only two sectors in Yorkshire which saw a fall in levels of distress month on month, the other being transport and haulage, which saw a substantial drop of 3.5% since October compared with a UK-wide rise of 1%. Nationally, only the restaurant sector saw a fall in firms at higher than normal risk of insolvency.

R3 uses research compiled from Bureau van Dijk’s ‘Fame’ database of company information to track the number of businesses in key regional sectors that have a heightened risk of entering insolvency in the next year.