35 of UK’s Top 100 restaurant groups now loss-making – up 75% in just a year

  • Oversaturated market, minimum wage hike put pressure on restaurants
  • Another minimum wage rise just weeks away

35 of the UK’s Top 100 restaurant groups are now loss-making, up 75% from just 20 last year, shows research by UHY Hacker Young, the national accountancy group.
UHY Hacker Young says that trading conditions have become increasingly difficult for restaurant chains dealing with oversaturation in the market as well as rising costs.
The firm adds that this research comes on the back of the high-profile struggles of several major restaurant chains in recent weeks, including:

  • Jamie’s Italian, started by Jamie Oliver, which has closed 12 branches as part of a Company Voluntary Arrangement (CVA) to restructure its £71.5m debt
  • Byron, the burger chain, which may close up to 20 of its 67 branches following a period of paying reduced rent
  • Prezzo, the Italian chain, which is expected to close some of its 300 branches as part of a restructuring
  • Strada, another Italian chain, which closed 11 branches over the festive period
  • Barbecoa, another Jamie Oliver chain, which entered administration in mid-February
  • EAT, the sandwich chain, which was rumoured in early February to be considering closing some of its 100 branches

UHY Hacker Young says that pressures of competing with numerous similar ‘fast casual’ restaurants in an overcrowded high street are a major driver of many large restaurant groups registering losses over the past year.

It adds that the National Minimum wage, which has risen by an above-inflation 19% to £7.50 per hour over the last five years, has added a substantial cost burden to large restaurant chains. From April 2018, the minimum wage will rise even further to £7.83.

Peter Kubik, Partner at UHY Hacker Young, comments: “More than a third of the biggest companies in the restaurant sector are losing money, and there is little respite on the horizon.”

“Pressures on the restaurant sector have been building for years, and the last year has pushed a number of major groups to breaking point.”

“With Brexit hanging over consumers like a dark cloud, restaurants can’t expect a bailout from a surge in discretionary spending.”

“Consumers only have a finite amount of spending power when it comes to eating out, and the oversaturation of the market means that groups that fall foul of changing trends can very easily fail.”

“The Government has ratcheted up costs with a series of above-inflation rises in the minimum wage, and we are just weeks away from another 4.4% rise in April. That will be tough for a lot of restaurants to absorb.”

About UHY Hacker Young:

 The UHY Hacker Young Group is one of the UK’s Top 15 accountancy networks with 110 partners and more than 620 professional staff working from 22 locations around the country. The offices within the Group provide a wide range of accounting, tax and business advisory services, with a reputation for integrity and reliability within the financial community, and particularly with London’s Stock Markets. UHY Hacker Young are also ranked 15th in the ARL Corporate Advisers Rankings Guide amongst other UK audit firms for advising London Stock Exchange listed companies.

UHY Hacker Young is a founder member of the UHY International network with offices in every major financial centre in the world. Further information can be found at www.uhy-uk.com



Quotas for female managers?

On International Women’s Day (8 March), Serena von der Heyde FIH MI makes the case for affirmative action to achieve greater diversity in the boardrooms of the hospitality industry19 Serena von der Hyde FIH

Like a lot of people, I don’t like quotas – I don’t think they are fair – but recently I have started to think again. Nearly 60% of the UK workforce in our industry are women yet only just over 20% of our managers are women, and these figures have been almost static for more than 20 years.  We know that businesses with more women leaders are more successful and more profitable, so why aren’t companies rushing to develop and promote them?  The benefits of diversity are proven, but still progress in achieving diversity is glacially slow.

We want a fair workplace for our young women and men, and optimum performance for our businesses, and yet a compelling business case has failed to bring about change; then should we consider quotas?

Quotas have been shown to get results, and fast.  They have been used across Europe to promote women in politics and business since Norway started in 2003.  Many countries including Iceland, France, Spain and now Germany have followed suit, and the numbers of board-level women have risen in those countries. What’s more, there is some evidence that where quotas have been in use for some time, diversity becomes self-fulfilling. The culture and infrastructure has changed to the extent that women and men are coming through to leadership levels in equal numbers. In Belgium, the quota system states that both sexes must be represented for applications for roles in politics, and recently it is male applicants that have been hard to recruit. For quotas to work, they need to come with strict repercussions. In France, businesses were threatened with de-regulation if they failed to meet quotas. In Spain there were no sanctions for not meeting quotas, and as a result Spain has been far less successful. Quotas without teeth are ineffective.

One of the main arguments against quotas is that they prevent promotion on merit. We want the best leaders for our businesses regardless of gender. But I challenge the notion that our meritocracy is working. If it was, wouldn’t we already have more women leaders? The truth is that our societal and cultural background is failing to provide a level playing field for our aspiring women leaders.  More women than men are graduating from our universities, and, on average, women have better grade degrees, but still we overlook their talents.  It is becoming clear that we have to learn diversity – it takes time for a culture to genuinely believe in the value of diversity, and then to implement processes that nurture it.

There is a difference between quotas and targets, in terms of delivering change; quotas enforce where targets incentivise. Personally, I believe that people learn better and change more when they can set their own agenda. Every business will have different issues affecting diversity, and real change is most effective when a strategy is developed specifically by the team for that business.  When regulations are imposed, teams spend half their efforts working on strategies to sidestep the new rules, and quotas can result in alienating the team.

For my own business, where we need to develop male leaders to ensure diversity, I will be:

  • Ensuring full and ongoing commitment to diversity from the leadership
  • Leading the development of our diversity strategy and targets
  • Publishing gender pay differences, and recording gender balance across the team and our leadership team

This type of approach gives businesses time to develop a pipeline of talented women (or in our case men), so that they can make quality appointments and showcase successful women within the business. I believe that hospitality businesses should be recording gender balance, monitoring gender pay gaps and publishing their own targets and strategy for diversity.  However, if these initiatives prove inadequate, then it is time to consider resorting to the faster, but blunter tool of quotas.

Serena von der Heyde FIH MI is the owner of The Georgian House Hotel, London

Sign up to the Diversity in Hospitality, Travel and Leisure Charter here.

Single-use plastic-free hotel launches in Bangkok


With over 8 million tonnes of plastic thrown away each year and and the existence of the Great Pacific garbage patch, the world is waking up to the dangers of plastic waste.

Whilst supermarkets plan for plastic free aisles and coffee brands ditch the cup lids, Akaryn Hotel Group plan to become a single-use plastic free hotel group by 2020. The newest opening, akyra TAS Sukhumvit Bangkok, launching May 2018, is set to lead the charge in this initiative.

Effort has been made to source glass bottle containers and there are is no single-use plastic used in the bars. Stainless steel water bottles, which can be refilled anytime during their stay, are handed to guests on arrival. Self-service drinkable water will be conveniently located on every floor. Guests will notice that in the bathroom, toiletry products are presented in locally manufactured celadon containers filled with essential oils-based products. Bio-degradable bin bags are used in room and shopping bags can be borrowed from the wardrobes to encourage guests to refuse plastic bags when out shopping in Bangkok.

akyra_sukhumvit_BSC02886 web res


Food additives are a cause of obesity, says Mike Duckett MBE FIH

Mike Duckett MBE FIH, centre, meets HRH The Prince of Wales

The hospitality industry has a responsibility to promote healthy eating habits, writes Mike Duckett MBE FIH, the ambassador for good hospital food and the former award-winning head of catering at The Royal Brompton Hospital, London.

“I have always worried about the amount of chemical additives added to food during manufacturing and the number of alien ingredients used to extend the colour and the shelf life of food, especially ready frozen meals. I have been very vocal in expressing my concerns which were confirmed recently when I visited the local hospital here in Surrey.

I was disturbed to hear of two eight-year-old boys who were hospitalised with severe pain from type-one diabetes. The senior nurse on duty told me that the main cause was their poor diet and lack of a variety of healthy food.

We therefore as the hospitality fraternity  have a collective responsibility to ensure that the food we serve is healthier.  We should persuade those who manufacture meals to be more aware of the steps needed to reducing high levels of obesity.

Statistics show that we are eating out more regularly and that we tend to eat more in a restaurant than in the home environment. This raises one important question. How safe is it to eat out these days? Recently we have heard that a major meat supplier was told by the FSA to stop supplying, a popular pub chain received a zero rating for hygiene,  and food factories change best before dates on food.  We also hear of customers dying from eating food that cause allergies. It makes you wonder if eating out is taking your life in their hands.

Hospitals, care homes, meals on wheels services and the general public are in the habit of purchasing  ready frozen microwave meals. These meals are high in fat, sugar and salt. Scientists have warned that emulsifiers – the chemicals widely used in processed foods including ice cream, bread and chocolate – may be a key cause of obesity. These emulsifiers are used to make smoother textures in foods such as peanut butter, sausages and mayonnaise. They are understood to be chemically active long after we digest them and they increase hunger and therefore we eat more.

If we are going to take the growing obesity epidemic seriously, we need an urgent look at what is being used in our food manufacturing and in the type of food and ready meals we serve our customers and campaign for the use of fresh local ingredients from as near the point of service as possible.”

25th Hotel General Managers’ Conference celebrates ‘The Spirit of the Time’

Delegates (2)Over 470 hotel professionals gathered at the De Vere Grand Connaught Rooms, London, on 15 and 16 January for the 25th Hotel General Managers’ Conference. The sold-out event, entitled ‘The Spirit of the Time’, reflected on the past, analysed the present and looked forward to the future of the industry during a programme of expert talks and panel discussions with thought-leaders.

Cyber security

The conference began with CEO & Co-Founder of cyber security platform Trustlight, Oliver Rees, introducing delegates to an era of ‘New Innovators’. Rees shared stories of how companies are engaging with hackers to keep their own cyber security ahead of the game: “When it comes to data security, think about ‘when’, not ‘if’. You need to have a strategy in place to limit the damage and communicate it to customers”. Rees also advised delegates not to be afraid of trial and error with experimenting with technology and to embrace innovation.


The Evolution of Food Panel (2)The Evolution of Food panel discussion was chaired by hospitality consultant Amanda Afiya. Founder of Gorgeous Group Robbie Bargh, Group Operations Director at Marcus Wareing Restaurants, Chantelle Nicolson, and Store Director of Selfridges, David Jarvis, discussed the growing popularity of plant-based diets, meeting changing consumer demands and standing out from the crowd. According to Bargh plant-based diets are here to stay and represent a ‘culture shift’ rather than a trend. Nicolson stated that the “rising costs, uncertainty in the economy and a squeeze on disposable incomes will mean 2018 is one of the toughest for trading” and Jarvis pointed out that “everything nowadays in hospitality can be copied, except your staff and the experience they give”.



The importance of creating a brand was a key focus over the two days. In Revolution Through Revelation, Managing Director of Mixxa Ltd Paul Martin said: “The brand lives in your people and it’s not about what you do but how you do it.” Branding consultant Tim Watson also touched upon this in his session, Why Brand?: “You need to communicate from the inside out, and once you have internal buy in, then you are on your way to being an authentic brand.”

Leadership, performance and mindfulness

Performance coach Nigel Risner inspired delegates with his session on leadership and communication. He suggested that people can be divided into four groups based on their preferred communication style – Lions, Monkeys, Dolphins and Elephants – and asked the audience to decide which animal they are.

Risner also said that people spend too much time talking about what was rather than what will be in meetings, and any meeting should be no longer than 40 minutes.

Olympic Gold Medallist Crista Cullen MBE gave an inspiring presentation about Crista Cullenteamwork. Cullen was a member of the GB Hockey team that made history in the Rio 2016 Olympics. Cullen said: “We invested time in getting to know each other, analysing each of our strengths and weaknesses to understand how we can work together efficiently.” Cullen explained that  honest conversations are what made the team resilient and hungry for the challenge, making them train harder.

In a session about mindfulness, Director at Soul Nutrition, Katie Sheen, shared her tips on how to become more self-aware and how to calm the mind to lower levels of anxiety. “The more positive and self-aware we are, the more resilient we become, and this feeds happiness and innovation” she said.


The Future of Hotel Design panel chaired by SPACE magazine and Hotel Spec Editor Can Faik, discussed whether design is becoming too extreme. When asked where hotels need to begin, Creative Director at HBA London Constantina Tsoutsikou, said: “The lobby is the heart of the hotel so if you want to convey what you’re about, that’s where you start.” Creative Director at David Collins Studio, Simon Rawlings believes there’s a danger that hotels are trying to be and do too many things and forgetting what they do best.


Founder & Chairman of 80 DAYS, Mark Forrester and Co-Founder & CEO of Avvio, Frank Reeves gave two different talks in the Consumer Behaviours in the Digital Age session. Forrester outlined the advantages of using digital benchmarking to get the best understanding of how hotel websites are performing. “For country hotels, there is a conversion rate of 0.49% meaning that out of 200 visitors to your website, only one will make a booking. The conversion rate is nearly double for city hotels at 0.94%.” Reeves followed with a talk on Artificial Intelligence (AI). According to Reeves all hotels of all types must start looking into AI to improve the user experience and convert website visits to bookings.


In a time of adversity and disruption for the industry, the conference programme included a round-up of Everything You (Really Do) Need to Know to continue business. Covering National Minimum Wage, GDPR and the most recent update in licensing, the data and information provided ensured hoteliers were aware of all the legislation to come into place over the next 12 months.

On the evening of Monday 16 January, guests were treated to a Moët & Chandon Sue WilliamsChampagne reception before indulging in a three-course dinner created by Principle London’s Executive Chef Rodger Olsson and his team. The Caterer’s new Editor, Chris Gamm, introduced the Hotelier of the Year winner Sue Williams FIH MI, General Manager of Whatley Manor. Williams urged guests to get behind their teams and inspire the future professionals of the industry. Guests generously took part in a prize draw to raise vital funds for the Master Innholders Charitable Turst, Springboard and Hospitality Action, raising over £10,000. Acclaimed food writer Matthew Fort took to the stage after dinner to share his anecdotes of his time in hospitality.

The two-day event was chaired by Pride of Britain Hotels chief executive Peter Hancock FIH MI on day one and by award-winning photographer and hotel consultant Jeremy Rata FIH MI on day two.

Chairman of the Master Innholders Conference and General Manager of Grosvenor House, A JW Marriott Hotel Stuart Bowery FIH MI concluded the conference by inviting hoteliers to apply for the upcoming Master Innholders accolade and Aspiring Leaders Diploma.

For more information on the Master Innholders, please visit www.masterinnholders.co.uk

Dates for your diary in 2018

To help you plan the New Year, we have brought together dates of interest to hospitality operators, including major sporting events, trade exhibitions, conferences, Institute of Hospitality events, and the introduction of new legislation.

8 January 2018RMOY 2018 logo copy (4)
Restaurant Manager of the Year 2018
Royal Garden Hotel, London
Organised and hosted by the Institute of Hospitality.

15-16 January 2018
The Master Innholders General Managers’ Conference
Principal’s De Vere Grand Connaught Rooms, London
‘The Spirit of the Time’ is the title of this year’s must-attend event for hotel managers.

26 January 2018
Institute of Hospitality Sussex Branch Annual Black Tie Dinner
Spread Eagle Hotel and Spa, Midhurst

5-6 February 2018
Hotel Investment Forum India (HIFI)
JW Marriott Mumbai Sahar, Mumbai
India’s most important hotel investment conference.

9-25 February 2018
Winter Olympics
South Korea

5-8 March 2018
Excel, London
The UK’s market leading hospitality and foodservice event ( 82nd edition).

12 March 2018
Institute of Hospitality Passion4Hospitality 2018
Novotel London West, London
The Institute of Hospitality’s flagship student and industry networking event.

20-22 March 2018
IFEX 2018
Titanic Exhibition Centre, Belfast
Northern Ireland’s premier food, drink, retail and hospitality event.

April 2018
New Acrylamide Legislation
Food businesses in the UK will be required to put in place practical steps to manage acrylamide within their food safety management systems under new EU legislation which will apply from April 2018.
Read guidance from the Food Standards Agency

1 April 2018
UK National Living Wage Increases
From £7.50 an hour to £7.83 (for 25 year olds and over)
Other pay increases include a rise in the rate for 21-to-24 year olds by 4.7% from £7.05 to £7.38 an hour, the rate for 18-to-20 year olds by 5.4% from £5.60 to £5.90 an hour, a 3.7% increase in the rate for 16-to-17 year olds from £4.05 to £4.20 an hour and a 5.7% rise in the rate for apprentices from £3.50 to £3.70 an hour.

4 April 2018
Gender Pay Gap Reporting Deadline
Private and voluntary sector employers in England, Wales and Scotland with at least 250 employees will be required to publish information about the differences in pay between men and women in their workforce, based on a pay bill ‘snapshot’ date of 5 April 2017, under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017. The first reports must be published by 4 April 2018. Read guidance from ACAS

9 April 2018
Institute of Hospitality Fellows’ Dinner
An evening of high-quality food and drink and exclusive networking.
The Royal Automobile Club, London

12-13 April 2018
Hospital Caterers Association (HCA) National Leadership & Development Forum 2018
Celtic Manor, Newport
HCA celebrates 70 years with the theme of ‘Delivering Today, Enhancing Tomorrow.’

14 April 2018
The Grand National
Aintree, Liverpool

19 April 2018
Institute of Hospitality Southern Branch: Student of The Year Awards 2018
Balmer Lawn Hotel, Brockenhurst

6-8 May 2018
Food & Hospitality Africa 2018
Gallagher Convention Centre, Johannesburg, SA
A gateway to the African market. With a footfall of over 6 600 of visitors over three days in 2017 – more than 80% of whom make or influence decisions.

11 May 2018
23rd Institute of Hospitality Awards for Professionalism Northern IrelandNI awards 1 web res
Titanic Exhibition Centre, Belfast
Formerly known as the Janus Awards, the largest event within the Northern Ireland Branch calendar.

19 May 2018
Royal Wedding of Prince Harry and Meghan Markle
Windsor Castle, UK

19 May 2018
FA Cup Final
Wembley, London

25 May 2018
EU General Data Protection Regulations (GDPR) Introduced
Members have free access to our ‘Get ready for GDPR’ Management Guide

26 May 2018
UEFA Champions League Final
Kiev, Ukraine

14 June – 15 July 2018generic
FIFA World Cup

2 -15 July 2018
Wimbledon Tennis Tournament

7-29 July 2018
Tour de France

19 -22 July 2018
British Open (Golf)
Carnoustie, Angus, Scotland

20-22 July
Rugby World Cup Sevens
San Francisco

3-5 September 2018
Speciality & Fine Food Fair
Olympia, London
The UK’s leading showcase of fine food & drink with more than 850 producers.

28-30 September 2018
The Ryder Cup (Golf)

16-18 October 2018
Independent Hotel Show
Olympia, London
A diverse collection of suppliers and expert insights from business sessions.

5-7 November 2018wtm_image_-_reduced2
World Travel Market
ExCeL, London
The global meeting place for the international travel trade.

21-22 November 2018
Sleep 2018 – The Hotel Design Event
For 11 years, Sleep has led the market as Europe’s premium event for hotel design and development.

November 2018 (date to be confirmed)
Asia Hotel and Tourism Investment Conference
The Galle Face Hotel, Colombo, Sri Lanka
More than 250 senior figures and decision makers involved in all aspects of hotel and tourism investment in South Asia expected.


Keep Calm and Control Costs in 2018

Melvin GoldThe UK has been a country of uncertainty in 2017, fuelled by the drip-drip of 24-hour news. On a macro level it seems that 2018 will see more of the same: Brexit, terrorism, politics, economics and much more besides, writes leading independent hotel consultant Melvin Gold FIH as he makes some predictions as to what lies in store.

But Britons have proved themselves to be resilient folk as has always been the case. Yes, there is much to complain about and much to worry about, but the country fundamentally keeps calm and carries on.

It is perhaps surprising that hotel markets in both London and the regions are ending 2017 in positive territory, strongly so in the case of London. Nonetheless, the second half of 2017 has been tougher, as economic factors produced headwinds and the supply pipeline increasingly moved from the drawing board to reality. Inbound tourism has boomed, the weak pound having seemingly magnetic properties. For the time being the UK appears relatively cheap. That has benefitted London, Edinburgh and the country’s most popular tourist cities.

The brave souls at PWC put their necks on the line every year in preparing the hotel sector’s most widely available forecast. For 2018 they forecast London’s RevPar growth at 2.4% and the rest of the UK at a similar 2.3%. If those levels are achieved, they are likely to be similar to UK inflation, so not much in the way of real growth, but given the way the news is reported and some of the retail figures, it could be far worse.

Of course there are variances by specific location and market, too complex to discuss here. It is also also worth reminding ourselves that regional UK is not a single hotel market, and neither is London.

Although the uncertainties connected with Brexit have adversely affected the currency to create the tourism boom, most hoteliers are more concerned about its effects on costs rather than revenues. The currency change, perhaps exacerbated by the uncertainties of future rights of work and residency, has seen some European workers relocate to other countries. The value of their remittances home was affected by the currency movement. Increasingly hoteliers and restaurateurs bemoan staff shortages and recruitment difficulties and if this prevails – which it probably will – it is likely to cause a more competitive labour market and wage levels rising. The Autumn 2017 budget saw the announcement of a 4.4% increase in the National Living Wage in any case, which is well beyond sector revenue growth forecasts.

Notwithstanding that, there remains a quantum of new hotels still to enter the market in many towns and cities. PWC took that into account in their forecast but nonetheless those hotels need staff and even if they are supported by demand growth they may imbalance the labour market.

This is not the only cost pressure, though. Pension contributions, imported food and beverage, energy, and property taxes are all likely to rise. Thus it is likely that 2018 will be a year which, if hoteliers have reason to complain, it will be about staff shortages and rising costs. Revenues may give less cause for complaint, other than the fact that they fail to keep pace with costs which impacts margin. In such an environment it is the smartest and canniest operators that will have least grounds for complaint.

One thing sure to distract from the other headlines and create inflows of tourists is a royal wedding and we will have one of those in May 2018. Tourism chiefs and hoteliers will raise a glass to the happy couple.

Melvin Gold FIH, is a leading independent hotel consultant and commentator.
More about him and the range of services offered by his company can be found at: www.melvingoldconsulting.com

Members of the Institute of Hospitality will receive your annual statistical report ‘Spotlight on Hospitality’ at the start of 2018, packed full of informed insights into the year ahead. Remember to renew your membership to secure this and many more benefits in the coming year.

The Royal Wedding will be a welcome boost for hoteliers and tourism chiefs in 2018