It was announced earlier this week that Jamie Oliver’s restaurant empire had sadly gone into administration. This is one of many chains which have faced closure this past year alone and the industry has seen a number of branches folding. Byron, Carluccio’s, the Prezzo Group, The Handmade Burger Company and Albion restaurants are among the high number of eateries declining in sales. But why is it so many previously leading restaurants are failing to hit the mark?
Unfortunately, we are living in uncertain times – Brexit has disrupted many British industries, the political climate is erratic, and Britain isn’t attracting tourists like it used to; these are just a few reasons for the shortcomings. In particular, the food and drinks industry is suffering due to rising living costs and economic uncertainty. Eating places are suffering due to the fall of the pound, making ingredients more expensive while staff costs have risen, noticeably because of the inflation in minimum wage. Around 2 eateries closed per week last year: including informal dining places, as well as plush independent restaurants.
Despite this, Intelligent is still receiving ample interest in the businesses for sale, within the food and drinks industry – having sold nearly £3,000,000 worth of SME eateries this year alone.
Whilst there is uncertainty now within the industry, it is likely that the industry will stabilise once Brexit negotiations are through. Many larger chains are failing due to the rising cost of ingredients which are often outsourced from European countries. However, humble independents may soar especially if they source items locally. Customers are becoming more self-aware and consumers are developing a preference to natural, modest, freshly baked items which are sought-after for their unprocessed, high-quality taste.
Cafés and restaurants in locations with high footfall – like in busy town centres or tourist areas – are likely to sell better, as they’re the ones that deliver the best and most consistent profits.
So, if you’re thinking of selling your catering business, now may be the best time for you…